Aktia Pankki Oyj

Good morning, everyone, and welcome to Aktia's Q1 results briefing. My name is Oskar Taimitarha. I'm head of Aktia's investor relations, and I will be moderator for this event. Earlier this morning, we published our Q1 interim report. Even in this turbulent market environment, Aktia's results were once again stable. A major focus during Q1 was, of course, the implementation of the new strategy we launched in February. Akties CEO Aleksi Lehtonen and CFO Sakari Järvelä will soon go through the results. And after the presentations, we're happy to answer your questions. If you're following us online, please feel free to write your questions in the comments field. Well, let's move on. Aleksi, the stage is yours.

Thank you, Oskar, and welcome on my behalf as well. For all of us who actively follow the markets, this year has so far been an interesting one, to say the least. News affecting the economy, both global and local, is coming thick and fast. In this environment, it's an advantage to be an institution with 200-year history and a related perspective and with an eye on the future of long-term value creation. Today, I will present yet another stable quarter in which Aktia launched an updated strategy with new long-term financial targets. Even in this turbulent market environment, it gives us a clear direction in everything we do for our customers, shareholders and society at large. I'll give an overview of the quarter and our CFO, Sakari Järvelä, will then delve deeper into the figures. Let us have a look at the Q1 highlights. First of all, Aktia's comparable operating profit, which amounted to 28.7 million euros, was in line with the previous quarter, actually even a little bit stronger. Compared to Q1 2024, the comparable operating profit was lower as the net interest income decreased due to the lower interest rate environment. The net commission income was 2% higher than last year, driven by good income from payments and cards business and also from fixed income funds. This is in line with our target setting to increase fee-based income lines. The comparable return on equity for the quarter was 13.5%. During the quarter, which was, as said, characterized by market turbulence, our AUM came down slightly. The main reasons were decline in market values and changes in individual institutional investors' allocations. On the other hand, we saw positive net subscriptions in the last month of the quarter. And on this topic of AUM, I'd like to remind you that from Q1 onboards, we report both net and gross AUM figures. Gross AUM at the end of the first quarter amounted to 15.7 billion euros. The performance of Aktia Life Insurance business was once again solid, although the insurance service result was somewhat lower than in the very strong corresponding quarter last year. On other fronts, we continue to develop and invest in our IT, and we have a fresh concrete example of this. As a part of our investments to build the bank for the future, we successfully upgraded our modern banking infra during the Easter break. Despite these investments, we've maintained and we continue to maintain strict cost control. Our credit loss provisions increased somewhat compared to last year, which reflects the market situation. Sakari will touch upon this in more detail later in this presentation. In February, Moody's confirmed our long-term A2 rating and raised the outlook from negative to stable. As a particularly important highlight of the quarter, I'm very pleased to share that the employee net promoter score, i.e. ENPS, rose strongly from plus 19 to plus 32 in the fresh survey we conducted right after launching our updated strategy. Satisfied employees usually correlate very strongly with satisfied customers. This supports greatly the Actia experience that we want to give to all of our customers, being a cornerstone of our strategy. When we compare the quarter with the previous quarters, we see this year starting in line with the end of 2024. This is also in line with our assumption for this year. We expect the comparable operating profit for 2025 to be lower than for 2024, mainly due to the lower interest rate situation. To ensure strong value creation, we launched an updated strategic plan and an acceleration program, which I will touch upon next. At our well-attended investor event on 27th of February, we announced our updated strategic plan, our long-term financial targets and our updated dividend policy. Our overall objective is to become a leading wealth manager empowered by a strong banking heritage. We are committed to succeed where it matters the most. In providing a genuine active experience, meaning the combined employee and customer experience, in focusing an active, comprehensive wealth management, and in winning in our strategic segments. We have competitive advantages and strengths to build on, such as a very strong client base and an award-winning asset management. To ensure an effective implementation of our value creation plan, we launched an acceleration program called Momentum. Through this concrete program, we will ensure that we can show measurable results already in the next two years. And let me briefly show you the building blocks of the program. As said, we will strengthen the execution of our value creation plan with the strategy acceleration program. This will ultimately result in an increase of our operating profit through a concept of operating profit run rate. This run rate increase should be considered as a high-quality recurring boost in our operating profit. We've launched 10 focused streams with numerous initiatives where we can see the biggest potential for growth and operating profit increase. The biggest impact can be realized from the six business-oriented streams market here in green. This will be supported by other initiatives such as operational efficiency, IT and balance sheet optimization. We'll take an active role in capturing growth by driving momentum in premium banking, private banking, small and medium-sized companies and institutional segments. We will strengthen our asset management operations by capitalizing on our high expertise and building on our service model. All this will be supported by our continuous efforts in data and technology to enable growth in a scalable and an efficient way, as well as the needed cultural shift underneath. We are confident that through these 10 streams in the programme, we will be able to achieve a recurring operating profit run rate increase of €20 million by the end of 2026. The work has started well, and as we said at our investor event, we will report every six months of the progress of this programme. So we are well underway and I can mention, for example, that new customer acquisition among premium and private banking customers is well ahead of our very ambitious targets for this year. And these customers have an average signed up for a broad range of products and services from several categories, which obviously I'm very pleased to see. An important argument for choosing Aktia is our accessibility, and therefore it is of great importance that our customer service unit has again received excellent marks for the service level with an NPS of a very high level at 60. In the times of uncertainty and market turmoil, we are well supported by this momentum program. Having in place an overarching program with focus on impact, it will support us in navigating any changes in our operating environment. And now, let us have a closer look at our three business areas and their performance in the first quarter 2025, in addition to sustainability topics. I will start with our asset management business. As I said in the beginning of this presentation, the first quarter was characterized by market turbulence. The turbulence has continued. Our assets under management came down slightly due to the decline in market values and net redemptions, mainly explained by changes in individual institutional investors' allocations. However, we saw positive net subscriptions in the last month of the quarter. International demand for our fixed income funds was strong. We launched a new private equity fund, Aktia Nordic Real Estate Opportunities, while Aktia Debt Fund 2 and Aktia SolarWind 3 were again opened for subscriptions. And let's take a look at the banking business. The pickup in new lending to private customers continued as we noticed in the fourth quarter 2024. New lending to private customers increased 20% year on year. The loan book remained approximately at the same level, and the average margin of the loan book continued to grow. The quality of the loan book has remained stable, and the collateral situation can be considered healthy. In corporate banking, the trend with strong growth in higher purchase and leasing financing continued. The demand for investment solutions remained strong, especially among premium customers, being an important part of our updated strategy. Last but not least, the service level in Q1 within our customer service was excellent and the NPS, as said, increased to plus 60, which I'm very pleased to see. And finally, our third business area, life insurance, which again delivered a stable net income. The insurance service result was relatively stable thanks to a growing insurance book of profitable risk insurances. Also, the investment-linked insurance book continued its strong growth. Life insurance is playing an important role for us in our wealth management offering and the Unitlink insurance is reached to a new all-time high over 1.3 billion euros. Then let's move on to sustainability topics. As we have reported before, we have already reached most of our 2025 targets one year in advance. This time around, I would like to specifically highlight the achievements here in the middle. As said earlier, the employee net promoter score, ENPS, increased to plus 32, which exceeds well our target level of 20, as defined in our sustainability program. This good performance was measured right after the launch of the renewed strategy, and the improvement was visible in all parts of Aktia's organization, making the results even more valuable. Thereafter, I would also like to draw attention to the SHE index, that measures and compares the gender balance in various organizations. We are at the level of 82 and starting to be very close to our target of 85. Already with 82, which is considered very high, Aktia is in the highest percentile amongst banking and capital markets companies. Our sustainability program will be updated later this year, and therefore an update also of the double materiality assessment has started. For the outlook, I'd like to inform that we keep our outlook for 2025 unchanged. Our comparable operating profit for this year is expected to be lower than the comparable operating profit for 2024. In our assumptions about net commission income, however, we are slightly more cautious and know that market uncertainty may have a negative impact on the net commission income. Now I will hand over to Sakari to go through our financials in more detail. Sakari, the stage is yours.

Good morning, everyone, and welcome also from me. Going into the numbers in the first quarter, as Aleksi already stated earlier, we are very happy to report a stable first quarter. Before diving deeper into the individual line items, I just wish to go through a few key highlights. First, the operating income decreased in the quarter, which is mostly due to the 3.9 million decrease in the net interest income. This decrease follows directly from the lower levels of short Euribor rates compared to a year ago. Our net commission income grew by 2% compared to Q1 2024. On the other hand, we managed to keep costs tightly under control with total operating expense of 44 million euros. Our comparable operating profit amounting to 28.7 million euros even increased compared to the previous quarter, as did the comparable return on equity, which was 13.5%. The bank group's common equity tier 1 ratio increased to 13% from 12, which is 4.4 percentage points above the minimum requirement. The improvement is explained by a partly temporary reduction in risk-weighted assets, which I will come back to later in the presentation. Looking at the net commission income, it did not offer any major surprises in the first quarter, increasing by €0.7 million compared to the corresponding quarter in 2024. We recorded an especially strong performance in higher service fees and income from card business, but also solid development from mutual funds, where the net commission income increased by 2%, mainly driven by fixed income funds. This is an important line of business for us, given our recently announced strategy, so we're very happy to see growth in the funds business. The net interest income declined in the quarter, as expected, following the significant decline in the short-term rates over the last 12 months. The reported net interest income was 3.9 million euros lower compared to the first quarter 24, and interest income from borrowing and lending decreased by 5.5 million euros. But this was partly offset by the falling interest cost from funding. At the same time, the deposit stock was slightly lower than in Q1 2024, but also slightly above the year-end level at the end of Q4 last year. Comparable personal costs remained relatively stable, as expected, and were in line with the second half of 2024. This was due to collective bargaining agreement increases, but also because of a temporarily low FTE count in the comparison quarter in Q1 2024. We have retained a very good cost control during the first part of the year with no increase in average headcount from the second half of 2024. We have on purpose increased our spending on IT since the beginning of 2024 as we continue to update our core IT system. This enables us in turn to meet the increasing need for speeding up our front end digitalization efforts and being able to further develop our data and AI capabilities. Depreciations decreased by 2 million from the comparison period, mainly due to impairments made in the fourth quarter of 2024. Impairment of credits and other commitments increased slightly compared to last year. The total increase in impairments from the loan book was €2.9 million, offset partly by €1 million of reversals of previous year's write-downs. Overall, credit losses are expected to remain at the moderate level. However, as we have stated earlier, the uncertainty in the Finnish real estate sector may affect the development of impairments and provisions for credit losses. This was taken into account in our decision in Q4 last year to implement an additional provision in the corporate loan book based on management's assessment. Our loan book consists mostly of loans to households and private persons with residential or real estate collateral with adequate loan to value levels. On the corporate side, there are some individual stage three cases which are being actively managed. Due to the good collateral position of the bank, we don't expect any substantial impact on credit losses. Coming back to what I mentioned earlier about risk-weighted assets or RWAs, there are two important methodological changes that will affect the calculation of our RWAs during the 2025 and hence also will affect the Core Equity Tier 1 ratio. Firstly, the new Capital Requirement Regulation, CRR 3, came into force at the beginning of this year. So in the first quarter numbers, we calculate our RWAs for the first time according to this new regulation, which leads to a relatively significant decrease in our risk-weighted assets of approximately 350 million euros compared to the year end. This effect is visible in our reported numbers now in our Q1 report. However, later in this year we will also implement another methodological change affecting RWAs. Currently we calculate our corporate loan book risk weights based on the foundational IRB model, but are in the process of moving to using the standardized model for this part of the loan book. This change will take effect in the third quarter of this year. Based on our initial estimates, this move from FIRB to standardized model will lead to an increase in our risk-weighted assets. We do not yet disclose a full quantification of this third quarter impact, but as said, we expect it to be an increase, and further, we expect the increase to be somewhat lower than the 350 million euro decline we recorded this quarter. These effects are shown in the illustrative diagram. So taking this together, there will be some methodology-induced volatility in our risk-weighted assets during this year, whereby we will report first 350 million euro reduction in the first quarter, which will be partly offset by an increase in the third quarter. Very importantly, though, I want to emphasize that the change to standardized model applies only to the corporate loan book, and we will still continue to apply the advanced IRB methodology to our retail loan book. Moving then into common equity Tier 1 capital ratio as shown here, it increased to 13% in the quarter, which is 4.4 percentage points above the minimum regulatory requirement. The improvement is mostly explained by the reduced risk-weighted assets, which as just explained, will be at least partly temporary as we expect a reduction in CET1 ratio in Q4. I would still like to emphasize though that we are very pleased that our capitalization continues to be solid. On 26th of February we were greeted by the good news that Moody's Investor Services had upgraded the long-term outlook on Aktie's credit ratings for short-term and long-term funding from negative to stable. At the same time, Moody's confirmed Aktia's short-term funding rating at A2P1 and long-term funding rating at A2. We see this as an important and good testament to the confidence in us, our financial position, our stability and our management. We still hold a very strong level of liquidity on our balance sheet, shown in our liquidity coverage ratio of 161%. This is somewhat lower than the level at the end of 2024, as we have deliberately reduced our excess liquidity during the quarter. In the funding front, we keep monitoring the market during Q2, especially for senior preferred private placements in euros. But we are very happy with the current liquidity level, so no large issues are expected right now. And finally, I would just like to recap on our long term financial targets for the five year strategy period we just started. Our three core financial performance targets are comparable return on equity, that is expected to exceed 15% by the end of 2029. We're aiming to have gross assets under management over 25 billion euros by 2029, and we aim to organically grow our net commission income over 5% per year. According to our new capital policy, we target common equity tier one ratio two to four percentage points above the regulatory requirement, and typically would expect it to be at the higher end of the range. Last but not least, we have made an addition to our dividend policy where we reaffirmed our goal to distribute 60% of the period's profits, but we guide that we could consider repatriating capital through extra dividends and share buybacks should we find ourselves in a situation of excess capital. We can note now that our CET1 ratio at the end of Q1 was above the higher end of the range in our capital policy. But as we expect a partial reversal of this quarter's increase again in Q3, we will be calmly monitoring the development of our CET1 later in the year. So no actions required or expected on this front. This completes my part of the presentation, so I hand back over to Oscar for the Q&A. Thank you.

Thank you, Aleksi and Sakari. Welcome back on stage. And now Kati Eriksson, EVP for Asset Management, has joined us as well. Welcome, Kati. Thank you. And, as I said, now we're happy to answer your questions. So, Aleksi, let's start with the Momentum program. How has it started, in your view?

Thank you, Oskar. Yes, we did launch the acceleration program called Momentum. At the same time, we launched the updated strategy. And the work has started really well, actively in every front on the 10 streams we have. which is overarching, consisting every part of our operation, and it started well. Particularly pleased to see, for example, our key private segments, private individual segments, premium and private banking. We are actually ahead of our relatively ambitious new customer acquisition targets. And therefore, the activity level that I see with Actions doing is of great level at the moment. So very good start.

Yes. Thank you. And on the same topic, Sakari, when you're talking about the momentum program, you're talking about the run rate. Could you please explain what do you mean by this?

Sure. As we discussed already when we launched the strategy in a little bit of detail, the RUN DRAID is what we follow to focus our efforts on the impact of actions we undertake. As we all know, the operating profit of a bank can be affected by many external factors such as the interest rate forward curve or values of risky assets, as we see it now in the market. But what we want to isolate is that in this program we have initiatives, as Alexi mentioned, and in these initiatives we undertake actions that improve our profitability. And it is this annualized impact of those actions that we want to follow with the run rate.

Thank you very much. Kati, we saw a clear turn for the better in international sales. What's behind this?

Of course, it's a continuous work that we've done for many years already. And now, obviously, I think this market environment gives our investors an opportunity to see the kind of diversifying effect of EMD, EMD frontier, EMD local currency. We saw in international sales both existing and new clients. you know, approaching us and investing in our good quality funds. So that was really nice to see. And obviously pipeline going forward is strong. So we are working on that every day.

Thank you. And then here on site, do we have questions here on site? Kasper Mellas Indres. Yes. There's the microphone.

Hi, and thanks for the presentation. Have you seen any negative signs in loan demand due to increased uncertainty? Talking about the last few weeks or the last month?

Alex, please. Thank you. What we saw in the beginning of this year, we saw increasing demand in mortgage loans and actually the new lending was up 20% year on year. Although we need to remember that the correspondent period last year was really, really slow. but obviously a good trend. For the very last weeks, the turbulence that we see has not resulted in any significant changes to the levels. We do monitor, of course, the activity, and as I said, our advisors are really active towards our clients.

Okay, then could you walk us through what was the difference between net and gross assets under management?

I can start and Katte can add, but the basic principle is that when we have our own funds that are part of different mandates or funds of funds, previously we did not count the mandates and the funds of funds separately. That's what we... or considered a net AUM but now we add this second layer in totality because all of that is fee generating and we believe that's more or less a market practice these days. So that's why we introduced the growth which is the difference between those two.

Yeah, exactly right. And reporting both of these, I think, gives perspective to analyzing the underlying, both the client AUM, but also the fee-generating AUM that we hold.

Okay, makes sense. Were the two million euros of reorganizing costs in Q1 related all to the acceleration program?

The great majority of it was related to the momentum program.

Okay. And when do you expect to book the remaining costs from this program? And is the estimated total still at 6 million euros?

Yes, the estimated total is still that 6 million euros. We expect that to materialize more or less linearly throughout the year, I would say.

And do you expect any significant one-time costs related to the change negotiations in Q2?

No large costs expected there.

Okay. Well, that's it for me. Thanks very much for the answers.

Thank you very much, Kasper. And then we have a lot of questions online today. Let's start with Antti Saari from OP. His first question. It was mentioned in the report that in Q3, Actea intends to switch from the foundation IRB approach to the standardized approach for corporate exposures. Could you give us any estimate about the magnitude of negative impacts on CET1? You said in the presentation that we're not disclosing any exact numbers, but would you like to add anything on this?

Sure, I mean, maybe I just say exactly what I said in the presentation, which is what we at this point in time disclose. So, as I said, from the CRR3, the impact this quarter was a decline of 350 million. Now, when we move from foundational IRB to standard, it will be an increase. It will be most likely less than the 350 million, so it's somewhere in between. also the graph on the slide was illustrative so you shouldn't try to measure it with a with a ruler so that that is not supposed to give you the right answer but uh but there's many things that will in the first quarters q1 q2 q3 affect the risk-weighted assets other than the move in this methodology so that's why we don't want to guide to accurately right now

Thank you. And on the same topic, Andreas Håkansson from SCB asks, he's thinking about the reason and asks, why will you move to standardized RWAs on the corporate side later in the year?

Well, the answer is that in our discussions with our regulator, the Finnish FSA, it became clear that the bar is a little bit raised on what kind of data and calibration is required for a bank to be able to apply an IRB model. And in the corporate side, our history and our internal data is a little bit shorter than in the retail side. So hence, we made a decision that we'd rather move right now than be forced to move later. So that is a sort of controlled action from our side.

Yeah, and just to add a good explanation, Sakari, just to add that on the retail side, we continue to apply and work with the advanced model that we have. So there's no changes on that side.

Yeah, and the loan stock, the majority of the loan stock is, of course, retail stocks. Indeed. Thank you. And then we have a lot of questions, of course, in this market environment about about the market environment and asset management. Katja, I'll turn to you. Jaakko Tyrväinen from SEB asks, April saw high uncertainty in the market. Have the turbulence been impacting your net flows recently?

No, I think the... The turbulence that we see, and if we think about institutional client segment, which is obviously volume-wise oftentimes affecting the flows, institutions are mostly in a way watching, you know, how this will play out. And obviously we all know that in a way both ends of the tails are thick, so definitely no big decisions have been made within the institutional space recently. But we do have a super active communication towards obviously institutions, but all of our private banking clients as well. And I think this is a very good time for an active manager, active wealth manager, to be close to the clients and offer any advice, any solutions that they might need.

Okay, thank you. And Jaakko Tyrvänen has another question. You have outlined a clear plan to grow your wealth management and AUM. The initiatives are still on early phase, but when are you expecting the actions to turn into more tangible growth in net flows?

Obviously, this is a long-term business and we wake up every day and meet our clients and do the work. And we just started with the project Momentum. But as said in the strategy launch, we have already, in a way, revamped and revised our client strategy in each of our strategic segments. And now we are working on to get those results. Alexi mentions already good results within the private banking and premium clients, gaining new clients. Within institutional space, we have focused on improving the quality of our RFPs when institutions go out for a tender. tender rfp tender so so we have actually have a high hit ratio during the first quarter above our targets which which were already ambitious so i think it's a good kind of in a way early signs of the the direction that we have is the right one

Okay, and then Antti Saari continues on this topic by asking, in Q1 and Q4 you have lost AUM due to allocation changes of few large institutions. Do you believe that this is already behind now?

Well obviously institutions are continuously working with their asset allocations but I think in a specific case of Q4 and early Q1 was that regulatory shift that we saw in a pension segment reflecting our pension segment clients revamping their asset allocations in new order. And definitely we saw asset allocation changes, a couple of individual clients that started late Q4, continued early Q1. And I think that shift might be behind us. But as I said, institutions are continuously revising their asset allocations and it might reflect either way. But we are supporting our clients and supporting their asset allocation decisions. And most importantly, we are supporting our clients' asset allocation decisions. We are not losing clients. And I think there is a big difference.

Okay, thank you. And actually, I think that you managed to answer the next question from Jakob Heslevik at SEB. He asked, could you provide some more color on the net flow in asset management during the quarter? But you just did. So thank you. Thank you for that. And then let's go to the world of loans and credits. So we have a couple of questions from SEB here. If you're ready to speculate, then Jakob Heslevik asks, what interest level from ECB is required in order for volumes to start growing stronger, Alexi?

Yeah, we do not like to speculate, first of all, even though the question is a really valid one. I could perhaps just outline that what we have already seen is the demand pickup and partly it might well be the declining ECB rate level. Now what the forward curve suggests is a bit of a continuous path that might easily also then support more for the individual consumer to rethink their living and purchasing new home and therefore applying a mortgage loan. Obviously, the turbulence around here is something that Possibly every individual considers what it means for their own finances. But we are here to support our clientele and new clients for their aspirations. And that's our aim. That's our purpose. That's why we are here. So we welcome everyone to discuss with us the possibilities for acquiring a new home, for example.

Thank you. And we have one investor asking, In your view, did Actia actually benefit from the RAID environment as much as its peers? What do you think?

Well, the forces are many fold. Obviously, the rate environment, which goes down, then hits our NII, as we've seen and as the whole industry has saw in these quarters. And then on the other hand, it possibly increases, for example, as just discussed, the propensity to consume, for example, a new house or apartment. So there are different ways. Obviously, also the centralized pay raises that we're going to see in Finland offers more leeway for individual private economy that helps and so on. So it's a totality, obviously, with the directions of many fronts. Thank you, Sakari.

Maybe I can just add, I mean, we don't follow our peers with that kind of granularity. But what is safe to say that where the low rates made banks operations very beneficial is when you had a very high amount of deposits on your balance sheet. I believe that we are on average a little bit more funded from senior financing and covered bonds. So in that sense, it could be that there's some truth that structurally we were not benefiting as much, but that is, you know, not based on a scientific argument.

Thank you. And this brings us to the question that I was expecting it, and now it came from Antti Saari, About hedges, of course. Are you still building hedges with the current interest rate levels?

I wouldn't say that we're necessarily building hedges. I think we've been following a very sort of structural plan in structuring our balance sheet. and we haven't changed that so we operate largely at the same level when it comes to balance sheet and any hedges we have as we did before so and we haven't been opening up our hedging policy in more detail and we don't intend to start now either but I think you can look at the history as a guide And the Pillar 3 report.

And the annual financial report. We have disclosed something, at least. Continuing on the topic of the balance sheet, Jakob Tyrväinen from SEB asks, could you give more color on the expected NII pressure coming from the continued decline in short-term rates? Should we expect similar magnitude in the coming quarters, given the continued slide of Euribor?

Maybe if I start, I think in the Pillar 3 report, we have quantified a 200 basis point shift down in the forward curve. Of course, that kind of shift has become a lot less probable than it did maybe a year and a half ago. And I think it looks like we have this year over the last six months or so, I think the rates have followed the forward curve relatively accurately. So we probably see some sort of plateauing level in the short-term interest rates in the next six months or so. That's what we expect. And in that case, obviously, when the rates plateau, you don't see such an effect.

Maybe just to add a very good answer, Sakke, that when we did our financial plan, which obviously our outlook is based on, that was based on the forward curve when it comes to rates. So we did not take any aggressive view in any sort. So changes in the forward curve is therefore then seen in our figures that we comment on.

Thank you. Do we have any more questions here on site? We have still one question, at least here online, from Jakob Heslevik at SEB. Could you give a bit more color on the elevated credit impairments in the quarter? Was there some clear one-offs there, or is it just due to general economic situation? How do you see trends in non-performing loans going forward? Perhaps, Sakari?

I can start and Alexi, feel free to add. I think there was no clear one-off. There were a handful of cases that were a little bit larger than the others. But as Alexi commented, I mean, we still see probably the late part of the impacts from the increased interest rates cycle in some of the credits. The impairments are a little bit elevated, but we sleep our nights relatively comfortably still with these levels.

and that is the good night's sleep is supported by a good collateral situation of our bank. We have around 84% of our loan book with LTV less than 50% on average. So that is fair to say that we are well secured in terms of the final losses. Obviously, rate increase that we saw a few quarters ago did affect on certain household customers' ability to service their debt and therefore the NPEs have been also developing in that direction. But we constantly monitor the situation, we are calm with it, we are forcing ourselves in stable slash moderate credit losses as we've seen in the past as well.

And maybe I just add, I mean, what is also good to note in our results, we also, you know, we added 2.9 million impairments in the book in the quarter, but we also reversed 1 million of impairments we had done in previous quarters, but we got payments. So that's also important to understand that we impair prudently. and write down loans when they are in default, but we also, given the good collateral, the final amount that we actually lose is not that number necessarily.

Maybe finally to remind us, probably all of us who follow us closely, remember we did in our Q4 result, we did a separate management judgment, 1.7 million euros, and we have so far not been touching it, so that keeps within our back pocket as an additional reservation for any losses.

Yes, and that was particularly in the real estate sector. Yes. So, that was the last question. We still have some time left. Is there anything you would like to add?

We are, as said, started our new strategy period and associated acceleration program, started well, and we are happy to invite all of the current customers and new customers to this fine story and fine journey ahead.

Thank you for that comment. Do we have any more questions here on site? Otherwise, thank you very much for the discussion and the questions. And many thanks to all of you, both those who have participated here on site and those who have been following us online. I wish you all a very nice day. Goodbye. Thank you. See you again.