Avanza Bank Holding AB (publ)

Good morning. With me in the room in Stockholm today, I have Carolina, Head of Investor Relations, Adnan, who has been our CFO during the interim period, and last but not least, Jonas Svärling, our new CEO, CFO, sorry, I hope not CEO, who will go through the financials after my initial presentation. So warm welcome to you, Jonas. The best news of the quarter was that Avanza for the 16th year in a row had Sweden's most satisfied savers, according to the Swedish Quality Index. It's also fantastic that we again ranked number one in every subcategory. Avanza's overall score was 77.6, which can be compared to the industry average of 70. Avanza's net promoter score remained highest in the industry at 41, while the industry average was at three. I'm especially proud of this achievement considering our scale and that we're growing, which makes it increasingly challenging to maintain high customer satisfaction across a customer base of over 2.2 million. We were also recognized as an employer where we were ranked as one of Sweden's most attractive employers by both Karriärföretagen and Universum. And attracting and retaining top talent is, of course, essential to execute on our strategy 2030. In Universum's survey, we also ranked 11th among those with over eight years of IT experience. This is fantastic since the market for senior IT expertise is limited and highly competitive. It is also impressive that our savings economist, Felicia Schoen, was honored during the quarter as Savings Profile of the Year and Digital Rising Star of the Year, which is a confirmation of our influence as a powerful voice in personal finance. On top of this, our new podcast that was launched this year called Inga Dumma Frågar om Pengar ranked top 10 most listened to podcast on Spotify during 2025. We have also delivered new products at high speed with several long sought after features now launched. With a focus on stock market enthusiasts, we now allow unlimited switches between brokerage fee classes, which is benefiting active traders who make transactions of varying size during the trading day. It was previously possible to switch brokerage fee class once a day. Customers who use manual currency exchange features are now paid dividends in local currency instead of automatic exchanges to Swedish krona. Also, the analysis tab on the stock pages now include forward-looking estimates. For our private banking clients, savings for children was improved to allow policyholders of endowment insurance to set the age for transferring their wealth to an heir, which private banking customers in particular have asked for. Something that we have wanted for many years is to be able to offer mortgage insurance LTVs of 85%. The way that the Swedish mortgage market is currently structured, many customers find their savings locked in with other players in order to get a better mortgage rate. I'm therefore very pleased that we as of this quarter now offer mortgages with an LTV of 85% through both our external mortgage partners, Stabelo and Lantz Hypothek. And as our CTO, Fredrik, spoke about in the Q3 presentation, Our target for 2025 within the cloud journey is to have migrated at least one production service to the cloud environment. And we reached this important milestone this quarter. And while this may seem like a small step, it means that everything is now in place for a broader migration. And last but not least, now adding the Q4 results, we can conclude that we are at all time high full year results. 2025 turned out differently than many of us had expected. I started the year with high hopes for the future, which was quickly turned upside down in the light of geopolitical turmoil and tariff chaos. The stock market climate with rapid and unpredictable turns has been tough for many customers to navigate in, and market statistics for the first nine months of the year show that Swedes deposited more than twice as much in savings on a net basis, but invested significantly less in equities, fixed income securities and funds compared to last year. This suggests that the large share of savings was stuck in current accounts with the universal banks during the year. We welcomed over 170,000 new customers and had a net inflow of 54 billion, despite these challenging markets and despite the wind down of our external deposit products. The lower rates and the expansionary fiscal policies speaks for a turnaround for the Swedish long-term savings market in 2026. And although long-term savings might not have been accelerating the way we would have hoped during 2025, trading activity did increase compared to 2024. As always, well connected to market volatility as you see top left. Bottom left, you see that the number of brokerage generating customers increased going into the year and have kept stable at the high level, showing a broad participation in the markets in 2025. Top right, you see the increased appetite for foreign securities trading. And bottom right, you see the need for our customers to further reduce their big home bias, which speaks for a continued trend towards foreign securities. When comparing our performance with the target, we have overall done a good job. We did have Sweden's most satisfied savings customers. Our colleagues showed a strong engagement with an ENPS of 57. We produced return on equity of 40%. The board is proposing a dividend of 76% of the profits. And the cost to savings capital ratio was further reduced from 14% 14.5 to 14.1 basis points. Our savings capital growth of 13% just fell short of the 15% target. The cost increase of 10.4% was in line with our indication of 11% for the year. And on the sustainability side, our sustainability score was improved during the year, but we still have large potential in helping women to save more. With respect to our target to grow savings capital by an annual average of 50% through 2030, we felt slightly short with a growth of 13%. The target was set knowing that growth will be lower in certain years, and this year our net flow contributed less than we had wanted. One reason is the ongoing process to close the external savings accounts. where we started the fall to close accounts belonging to partners that are actively migrating the remaining deposits to their own platforms. In early 25, just before we announced this move, there was nearly 43 billion of our savings capital in these accounts, of which over 26 billion now has left the product. We estimate that 55% of these, sorry, 26 billion has stayed with Avanza. We also expect to retain approximately the same share of the remaining 16 billion. Retaining more than half of the volumes we decided to phase out says a great deal about the strength of our brand and that customers want to consolidate their savings with Avanza. On the other hand, it also means that we expect our net inflows to continue to be offset by around 8 billion in outflows due to the wind down of external savings accounts. until the process is completed in late May 2026. During 2025, we have progressed well with executing on our strategy across all five pillars and the target fulfillment I discussed earlier. I think there's strong engagement and energy among my colleagues for the way forward, which is important. Jonas, you have been with Avans exactly two weeks, so I'm certain that you know every financial number inside out by now. Over to you, Jonas. Of course. Thank you, Gustav.

And good morning, everyone. Great to finally be here. Before we move on to financials, I thought it would be good to just briefly introduce myself. As you said, Gustav, I joined Avanza as CFO just two weeks ago. And joining now is really exciting, given what has been set out in our strategy 2030 and the quite ambitious growth plan. And if you add to that, Avanza's market leading position in Sweden today, and also its great culture. It was not difficult to say yes when you offered the job, Gustav. So my views on operation efficiency, scalability and volume and customer growth ambitions, et cetera, are a little bit too early obviously to talk about. However, what I have experienced in the first weeks is the culture. I think I've never seen such joint or common and clear commitment, or I should rather say passion, for savings and investments and actually bringing that to customers and that goes across the whole company. And that really stands out to me how people here love making great savings products and also helping each other. I joined from SEB where I spent more than 21 years in different finance risk and treasury positions as well as in different Swedish and Nordic CFO roles. Most recently, however, I co-headed SEB's retail and business banking operations in Sweden, including the branch office network, the telephone bank and the digital banking app and web channels. I hope I will be able to add some knowledge from being responsible for all Swedish private customers, including the smallest private banking segment and also smaller corporate. And before SCB, I co-founded an IT consultancy firm and also launched a hedge fund. So I originally actually worked as a programmer, giving my engineering background. So I look forward to meeting and talking to all of you later. But now let's get into the financials of Q4 last year. And speaking of joining at exciting times, of course, it is extra good to be here presenting the financials as we're reporting record full year results with both trading and interest related income streams contributing to that. We're also reporting quite a strong Q4 with operating income in line with previous record levels. However, as we have planned for and also guided for, we're also increasing the cost this quarter, resulting in an operating profit of 733 million. which is still strong, although 10% lower than Q3. If you look at the full year costs, they came in at a 10.4% cost increase, 7 million or slightly below our guidance of 11%. All in all, net profit is up by 17% compared to last year, and return on equity at a healthy 40%, meeting the road target of at least 35%. Earnings per share is at 16.57, up 16% compared to 2024. Now, let's look at the income side. And here we still see a stable and healthy income mix with some underlying trends that will begin to. It's been, as I said, a little bit of a special year with quite volatile markets. And as usual, volatility correlates quite well with custom activity. And as a result, we're seeing trading-related income accounting for an increased share of revenues compared to last year. At the same time, NII has remained stable despite lower market rates. Altogether, this has resulted, as I said, in all-time high revenues in 2025. If you look at Q4 specifically and start with brokerage income, trading activity held up well, although we saw a little bit of a slowdown in December, where we also had quite a few days when the stock market was closed. There were actually 4.5% fewer trading days in Q4 compared to Q3, which contributed to a 4% decrease in brokerage income. Adding to this, the brokerage margin then decreased slightly to 11.2 basis points down from 11.4 as private banking and pro customers had a higher share of the brokerage, 26% compared to 24% last quarter. When it comes to foreign trading, that high interest remained throughout the year, apart from a shortly dip in April. And in Q4, the turnover in foreign securities accounted for 30% of brokers generating turnover. And in absolute numbers, it was the second highest turnover in foreign securities ever, resulting in a strong FX income in Q4. Moving over to fund commissions, we're seeing some margin pressure this quarter with the share of index funds increasing to 50.6% by the end of the period. The fund margin decreased to 24.4 basis points on average and was at 24.0 basis points by quarter end. And when it comes to the margin, the split between active and passive funds is one explanation, but also what type of index funds our customers choose to allocate their funds in can also have an effect. As you talked about, Gustav, we hope for a stronger Swedish economy in 2026, and we also see that in science in terms of fund savings, where we're seeing Swedish index funds among the most net bought during the later part of the year. These are in general priced lower than those with international exposure, thus lowering margins. However, when it comes to funds, volumes are growing and despite the negative margin development we have an all-time high fund commissions both for a single quarter and for the year. Lastly other income was weaker in Q4 explained both by decreased income from several smaller and different income streams and on the other side as well several other smaller commission cost lines that are not reported separately. Part of this is related to the income from external savings accounts, which is a volume-based distribution income, which naturally then decreases as we are closing down these accounts, as Gustav highlighted. Also, costs for payment commissions increased as a result of more people logging in when markets were quite shaky, which means increased costs for bank ID usage. Income from corporate finance also decreased, while the income from Avanza markets increased. If we move over to NII, the importance of our growing volumes is once again demonstrated. Despite 100 basis points lower policy rate today than going into 2025, full-year NII remains stable compared to 2024, thanks to the increase of both deposit and lending volumes. This applies for the quarter, where we are seeing a volume-driven increase of NII despite the latest and possibly last policy rate cut on October 1st. If you first look quickly at the lending side, we reduced the rates on margin lending by 13 basis points following the latest policy rate cut. The mortgage rate, however, is directly tied to the policy rate and was consequently reduced by 25 basis points. The combined effect of these two rate changes led to the average rate for internal finance lending decreasing to 2.81% from 3.01%. We believe we have a quite an attractive offering when it comes to the mortgage and we have also done some extra marketing as you can see later in the cost part towards private banking clients and we're seeing some quite nice results of that in mortgage volumes that increased by over 1 billion in the quarter mainly related to private banking customers. Moving over to the interest cost side, interest expense for deposit increased some due to the higher internal deposit volumes and an increased share of deposits that are on interest-bearing accounts. That was at 58% compared to 54% last quarter. This was to a large extent an offset, however, by the lower deposit rates, which was a decrease with the policy rate cut on October 1st and the average annualized rate on deposits was 0.76% for basis points low in the last quarter. To summarize, NI remains a stable contributed income mix and as said, the volume is the key driving factor. The Riksbank is estimating unchanged policy rate going forward unless there are changes to the outlook for inflation and economic activity. This would indicate a more stable rate and thus margins going forward all else equal. Moving over to costs. The full year costs increased, as I said before, by 10.4% compared to 2024, meaning that our spend has been 7 million Swedish kronor lower compared to the guidance of a cost growth at 11% in 2025. The slightly lower costs are explained mainly by us being able to keep the cost for the cloud journey below budget, and to some extent also by our work on operation efficiency, where we've been quite successful in reducing external spend during the year. Looking specifically at Q4, we are at 24% higher cost than Q3. That's an increase we flagged for when reiterating our guidance in the last quarterly presentation. As I'm sure many of you know by now, our staff costs are season low in Q3 due to vacation debt being reduced and as a result are now comparatively higher. In addition to that, we had more consultants on site mainly tied to the cloud migration. And on top of that, the marketing costs are up quite substantially this quarter compared to the very low levels of answers you should add. Our very strong brand and our customers' high willingness to recommend us is typically how we drive inflow through word of mouth. However, we do not have the same brand recognition when it comes to private banking and occupational pension. And that is why we increased our marketing initiatives towards these segments, which, as we saw earlier, improved, for instance, lending to the private banking sector. It is quite important though to note that this quarter's cost level should not be seen as the new quarterly run rate for marketing costs going forward, although we will continue to work to build brand awareness as part of our efforts to grow within private banking and pension. This reasoning also applies to the full cost base where not all of the cost increases in Q4 are recurring running costs. If we look into the future in terms of costs then, Our long-term target is as communicated before an average annual cost growth of 8% up until and including 2030. And I said this cost growth will be higher at the beginning of the period as we're investing within our Swedish growth initiatives with the aim to reach 5% by 2030. This implementation or strategy that continues at full speed and we forecast cost increase by 9% in 2026 driven by continued investments in Accelerate Growth in Sweden. The planned investments include work to develop our private banking business and the launch of our new discretionary portfolio management product, as well as investing in our pension business. It also includes all the continuous work within our core business to make sure Avanza stays in the forefront when it comes to offerings and user experience. The cloud journey also continues, where you mentioned that, Gustav, that we reached quite an important milestone during the quarter when we migrated our first production service to the cloud, meaning that everything is now in place for broader migration. And in 2026, the work will be focused on migrating services that we find suitable and easy to move at a controlled pace. We are, of course, not immune to inflation, which will drive some of the cost growth as well. Our work on improving our internal efficiency is quite important to offset this. Total salary adjustments are expected to amount to around 4%, which when you consider staff costs as a share of total cost, yield a cost increase of somewhat above 2%, as illustrated on the slide. Our cost increase is related to investing in further growth and we continue our work to improve internal efficiency to be able to meet the planned volume growth with an improved platform. Avanza is built on scalability and we are the leading position when it comes to cost to savings capital ratio and we intend to maintain that position. The target is to decrease the cost to savings capital ratio over time and in 2025 It decreased to 14.1 basis points compared to 14.5 basis points in 2024. Finally, I'm concluding a note on capitalization and the proposed dividend. Avanza is well capitalized with prudent margins, both the leverage ratio, including PILA 2 guidance and the total capital requirement, including risk-based PILA 2 requirements. The binding constraint is the leverage ratio, and even though our deposit volumes on balance sheet has increased substantially during the year, largely driven then by the closing down or external savings accounts, we still have a healthy margin to leverage ratio requirements, which should be stressed very poorly, captures the extremely low risk profile of Avanza's balance sheet asset side. Taking this and the strong result into account, the board has decided to propose a higher dividend per share compared to last year of 12.75 krona per share. This corresponds to a payout ratio of 76%, which exceeds our target of 70%, but also leaves us with capital flexibility going forward. Concluding, and maybe repeating myself a little bit, as you can see, we still have good headroom to the total leverage ratio requirement of 3.5%, including the pillar 2 guidance of 50 basis points, which, as said, is the most constraining requirement for us This gives us a position where we can handle increased deposits of 32 billion Swedish krona before reaching it. And with that, I will hand back to you Gustav for some closing remarks.

Thank you. I again start the new year optimistic about the future. May sound strange given what's happening around us with Greenland, but we have received positive signals on inflation and that personal consumption is starting to grow. The Riksbank's policy rate of 175% is a whole percentage point lower than that at the start of 2025. And this is important for Swedish households who are more rate sensitive than in other countries where we typically own our homes and we often have variable rate mortgages. The government has issued an expansionary budget for 26, which is likely to help the Swedish economy to finally gain momentum despite continued global uncertainty. I believe and hope that this leads to 2026 being a year when households actually have more money left in their pockets, which should be positive for the Swedish savings market and for Avanza. Now we're happy to take questions from you.