Svenska Handelsbanken AB (publ)

Good morning everyone and welcome to this presentation of Handelsbanken's results for the full year and fourth quarter of 2024. Before the presentation, let me just start by saying it's a very sad day in Sweden today, following yesterday's tragic events in Örebro. Our thoughts go to the victims and their relatives. The fourth quarter showed an operating profit of 9.2 billion, the highest Q4 results so far in our 153-year history. The ROE amounted to a touch above 14%. Despite a year with sharp rate cuts by central banks, the income generation has remained resilient. The cost initiatives we launched during the spring have been to the most part been executed and it's now bearing fruit and showing in the numbers. Cost income ratio remain below 40. And also in this quarter we have net credit loss reversals. The board proposes a total dividend of 15 krona per share with an ordinary dividend of 7 krona and 50 öre and a special dividend of 7 krona and 50 öre per share. The financial position remains solid, and after the deduction of the proposed dividend, the CET1 ratio was 18.8%, which is almost 400 basis points above the regulatory requirement. Now, if we look closer at the fourth quarter, we can see, as previously mentioned, that the cost-income ratio was 39.7, and the RE amounted to 14.2%. Net interest income remained resilient and was more or less flat compared to Q3, while down marginally when adjusting for currency effects. The fee and commission income continued to grow and was up 3% compared to Q3. Total income increased by 3%. Total expenses increased by 7%. But adjusted for an octagonal provision of 68 million and restructuring expenses of 146 million, the expenses increased by 4%. The net credit loss for various covers amounted to 232 million or three basis points. All in all, operating profit grew by 3%, adjusted for items affecting comparability. If we move over to the full year results on slide four, we see that ROE amounted to 15%, the cost-income ratio to 40%, and the net credit losses recoveries of two basis points. Net NII was down 2%, mainly as a consequence of lower net effects of margins and funding costs. Net fee and commission up 5%, with the key contributor again being the savings and mutual funds business. Expenses increased by 9% and 7% if we adjust for items affecting comparability. The increase was attributable to annual salary inflation, increased pension and staff costs. The average number of employees increased by 5%, of which increased four percentage points were attributable to additional employees working in the branch operations and one percent point to the bank's IT development, primarily through the replacement of consultants with employees. However, the staff, total staff, i.e. employees, as well as external consultants, were 5% lower at year end and compared to year end of 2023. This as a result of the efficiency work carried out in the bank since Q1. So all in all, the operating profit declined by 2%, adjusting for items affecting comparability. Now, if we zoom into the NII development compared to the previous quarter, the NII remained resilient as previously mentioned. For the first time in four and a half years, we saw an increase in lending and deposit volumes in all of our home markets. While the growth was still minor, it contributed with 105 million to the NII. As interest rates drops, it's fairly natural to gradually see credit appetite among our customers recovering again. Like we've seen now for a few quarters, the net of margins and funding costs were negatively affected by the further rate cuts by the central banks. All in all, the effect from the net of margins and funding was minus 208 million. This was, however, partly offset by positive FX effect of 70 million due to the weakening of the Swedish krona. Net fee and commission income grew continually, continued to grow also in the fourth quarter, up 3% compared to the Q3 and up 10% compared to the Q4 last year. Almost 70% comes from the savings-related commissions. And it also there, that's where we saw the main pickup in the quarter and during the year. Payment fees also rose in line with normal seasonality. Now let's take a closer look at the savings business in Sweden, which is the main contributor to savings and related fees and the mutual fund market. So in Handelsbanken, 2024, we were the largest player when it comes to the net inflows into mutual funds in Sweden, with a market share of 18%. Since 2011, Handelsbanken has attracted almost one quarter of 24% of the total net new savings into the Swedish mutual funds market. The market share of the outstanding volumes is still only 12%. suggesting potential to continue to grow well ahead of the back book market share also ahead. Now, over to the expenses. 2024 was a year with intense internal work in order to first identify and then address efficiency enhancing measures. By year end, most of the work was finalized. We have trimmed especially central and business support functions and have come a bit on the journey of working even more efficient. At the same time, as we have reduced central and business support functions, we have increased our efforts and resources in the areas where we meet customers. In Sweden, we now meet our customers at more than 20 new physical locations as a complement to our existing branches. At these locations, the customers can get service and advice every now and then. Some of these locations are open daily, others only a few days a week. The opening hours are trimmed in line with the customer's demands. But on a net basis, as you can see on the right-hand graph, the reduction of total staffing, meaning FTEs and external consultants, resources have been material since the launch of the initiatives in Q1. Since Q1, the staffing is down by 778 people, or 6%. The dotted line shows the average number that naturally lags and suggests some tailwind to the average number moving into next year. The efficiency measures are now also starting to show in the cost base, as you can see to the right. Cost increased in Q4 in line with normal seasonality, but the graph clearly shows a break in the negative cost trend we've had since running up to Q1. During the course of 2024, we also had a reported cost base that was elevated due to a restructuring expense related to the cost initiative programs. As mentioned before, we do not expect these to repeat in the next year. The efficiency programs have not only reduced our running cost base, they've also enhanced and strengthened the cost culture through the bank, which is essential for the long-term improvement of the profitability of the bank. Now over to asset quality and credit losses, or rather the net credit recoveries that we've seen now for four consecutive quarters. For a long time, credit losses have been more or less zero, and asset quality remains strong, just as expected. The reason for this relates to the bank's limited risk appetite and the consistency in the underwriting, the preference for collateralized lending, and not least the local presence and connections through our branches. Also in this quarter, the management add-on was trimmed down a bit, this time by 229 millions. Excluding the add-ons, there were a few millions of further net loss recoveries. The add-ons is always reassessed each quarter and stood at 149 million at the end of the year. The strong financial position of the bank enables the board to propose an extra and increased ordinary dividend compared to last year, while remaining almost 100 basis points CET buffer above the long-term CET1 ratio target range. The board proposes a total dividend of 15 krona per share, of which 7.50 was an ordinary and 7.50 was as a special dividend. After the deduction on the proposed dividend, the CET1 ratio stood at 18.8, which is, as said, is almost 400 basis points above the SREP. The extra capital buffer that the bank retains for now should not be seen as a buffer for risk that the bank sees in its own operation. It should be seen as a general precautionary measure given the current general geopolitical unrest and as well as stated that the bank should always be considered the most stable and trustworthy counterpart in the market. This is the view that the leading rating agencies already have on the bank, as no other privately owned bank in the world has a higher combined credit rating by them. Assessment of the additional capital buffer of 100 basis points above the long-term target range will be reviewed continuously going forward. Now a few words about respective home markets. In our largest market, Sweden, the development is stable. The cost-income ratio is around 30%, and the return on allocated capital almost 17%. The bank has a strong market position in Sweden as the largest combined lender in private and corporate lending. And as mentioned earlier, the largest player in the mutual funds market in terms of net inflows of new savings. In Norway, we've seen significant improvements over the course of the year. The cost-income ratio has improved from 52% in Q1 down to 41% in Q4. After the refocus period during the spring, the growth is now more balanced between lending, deposits and savings. And we are very pleased to see that our footprint in the Norwegian savings market has improved significantly during this year. In Q2 and Q3, our market share of the net inflows into mutual funds in Norway was more than twice as high as our market share of the outstanding mutual funds volumes. And in Q4, it was more than 6.5 times as high, as the bank attracted more than 15% of the net inflows in Norway in the fund market, compared to the market share just above 2% of the total outstanding volumes. Just like in Sweden, the trend suggests good potential to grow these capital light and already enhancing income streams also going forward. And cost initiatives are also starting to show in the numbers. As a result, the profitability has improved with the return on allocated capital now over 13%. In the UK, we saw business volume growth in both lending and deposits for the first time in four and a half years. And asset under management also grew healthy. The return of 16.4 was almost as high as the bank's Swedish operations. And finally, the Netherlands, which is the smallest market, smallest home market of the group. Also here, we saw business volume growth, especially in asset management and deposits. ROE increased slightly compared to the previous quarter and it was up to 14%. So to sum up, Despite NII headwind from lower central bank's policy rates, the income generation has been stable. In the beginning of the year, we saw what we needed to do. We reorganized the bank in 4th of April and started to execute on our plans. And in the second half of the year, we saw the effects that we've anticipated. Asset quality remains as robust as it should be for a bank with hundreds bankers risk appetite and risk profile. And the capital position continues to be very solid even after an increase of the proposed dividend. And finally, and not least, on the back of increased customer activity and the customer's demand for meeting the bank physically for advice and support, we adhere as always and have expanded our local presence accordingly. So with those final remarks, we now take a short break before moving into the Q&A session.

Thank you for now. Thank you. . . We'll be right back. Thank you. Thank you. Thank you. Thank you. Thank you.

Hello everyone and welcome to the Q&A session. This is Peter Grabe, Head of Investor Relations speaking. As always, we would like to remind you all that we prefer that you ask one question at a time and then follow-up questions can be asked when it's your turn again. And with those words, could we please have the first question, please?

Thank you. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To answer your question, please press star 1-1 again. We will now take the first question from the line of Magnus Andersson from AVGSC. Please go ahead.

Yes, good morning. I think I'll start with UK, actually, since I doubt we will get any... comments around potential timing effects, et cetera, in your NII, group NII. So then just on the UK loan book, as you said, Michael, this was the first time since Q2 2020 we saw a sequential increase. If you could tell us anything, whether this is by Your design, you think that it will actually bottom out here, or whether it's market-driven, how you should think about this going forward. And also, related to that, I mean, your loan-to-deposit ratio in the U.K. has gone from nearly 115% down to, I think it's 84% this quarter, which, all in all, should be more sensitive to short-term rates now when they decline in the U.K. than you were on the way up. Is that the case or have you in any way increased your hedging arrangement

Good morning, Michael here. I'll just start off with the first question. I'm happy to see that the demand for lending and financing most into the business or the corporate segment is picking up a bit during Q4. And you can see that there is... a bit stronger trend in terms of business proposals from the UK right now. And that's mostly into the corporate side. There are some improvements also in the mortgage side, on the private mortgage side. And they work quite intensively with trying to get more deep into that market. And we are a bit hopeful with that, but we need to make it happen during the 2025.

And if I may add, morning, Magnus, it's Carl here. On the mortgage side, there's been a structural change over the last 10, 15 years of the UK mortgage markets. Right now, more than 90% of that market is covered by independent brokers. And you know Handelsbanken well, so we've had our challenges to adapt to that market. But as of lately, we have piloted three nationwide broker firms which we cooperate with. And our ambition is to increase that one during the next six months. So we look positively on the actions we take. And we wouldn't be surprised if we turn to positive growth there as well. So we're pleased to see the growth. When it comes to the loan to deposit relation, as you highlight, yes, we are a very stable bank. We have the highest rating. We have a higher rate in the UK as a country. So we do attract a lot of deposits and we have more deposits than we have loans today, as you say. So, in that essence, yes, we are a bit more sensitive in the UK. And as you've seen, we have high net interest margins there currently. Having said that, we've also had quite low ratios, actually, of deposits at transaction accounts. But we haven't changed our hedge behavior, not in the UK nor anywhere else.

Okay, two follow-up questions then. Just on corporate lending, it looks like property management is up quarter on quarter. I know it can be a bit volatile depending on single transactions, but have you changed your risk appetite or view on that segment at all in the U.K.? ?

Absolutely not. We have the exact risk appetite as we always have. So that is just due to the fact that there are more business to look into and we're competing on a bit. A bit better on the Q4 than before. No change in the way we look at risk.

And we said earlier on that we see extra amortizations. They might have leveled off a bit. And also we said for a few years now that we have started being more extrovert and we've gone through a tough phase. But we have for the last 12 months or so been able to build and strengthen our client relations.

Okay. Thank you.

Thank you. We will now take the next question from the line of Andreas Hakanson from SEB. Please go ahead.

Thank you, and good morning, everyone. So on the cost side, I hear that you don't expect any restructuring costs further in 2025. We've many times talked about how your business is structured that you might want to grow in capitalized areas. And I think you have said in the past that 2024, you dealt with the cost and then you have to look at revenues in 2025. Could you give us any flavor of the cost outlook you have for the year? Are you getting prepared to start to invest in the business? And should we expect some more chunky investments coming through in 2025? Thanks.

Morning Andreas, it's Karl here. Well, I mean in 2024 we have been working quite a lot on efficiency gains and as you can see we made quite a bit of progress. But during the year it's actually been, we have both accelerated some areas and we worked quite tough on other areas. As Michael said, we've come quite far in the larger efficiency gains to be made during next year or during 2025. We will continuously try to work on the cost culture, not at all leveling off on that aspect. Having said that, we've already have made investments and we will keep on doing it to strengthen our economy. commission income. So that is definitely key focus of us and I think we have proven during 2024 that it's been possible to do both.

So Andreas, Michael here. So the work we've done in order to get the bank in a better cost position and therefore also being more competitive in our markets is mainly done in the, as I said previously, in the headquarter and business support functions. Actually, when it comes to the business and the income-generating part of the bank, meaning the branches, they've increased resources during the year, as you can see in the headcount numbers. So we've increased. So we have put the foot on the throttle and also on the brake at the same time, but in different areas of the bank. So that's a swift switch from resources in head office to resources where it do more – that we could do more business within the branch network.

And I guess I can't tempt you to have some sort of an outlook on your cost growth like the other banks have.

Sorry, you're not going to get a cost outlook, no. No. Yeah.

Thank you.

Thank you. We will now take the next question. From the line of Sophie Peterson from JP Morgan, please go ahead.

Yeah, hi, this is Sophie from JP Morgan. So just two quick questions. On the dividend, one of your peers is going to split the dividend into two tranches against 2025 dividend, so paid in 26. Do you have any similar plans? And then part of the second question would be, How should we think about your non-Swedish operations? Do you have any plans to kind of scale them up? Or do you have any plans of kind of exiting any markets? And how do you think about M&A opportunities? In the UK, there seems to be a lot of demand to buy other banks. Would you consider kind of participating? Thank you.

Thank you, Sofia, and good morning. First of all, on the dividend split. No, I mean the payable dividend now is money which is built and within the bank is built during 2024. So we think that it's definitely best for us to pay it out at once. So we won't go to semi-annual dividend payments on that one. That's the first question. The second question is, I think it's fair to say that we look constructive or positive on the growth ambitions outside of Sweden, i.e. UK, Norway and Netherlands. We are really pleased to see now that we are in a good situation. UK is starting growing nicely. We are making a lot of progress in our achievements both to the mortgage market but also in the asset management business. Norway, I think, has been the clear performer during the year. During the year, we have moved that segment or that country in a very positive way. We have been able to both cut costs, but especially work with the union agreement and been able to attract very balanced flows, both in lending, but also deposit taking and assets under management. And our Norwegian assets under management has grown by 28% during 2024, and 18, one eighth of that comes actually from net fund flows. So Norway is just a year. Yes, I understand that. But still, it is starting picking up the dynamic trends we've seen in Sweden for many, many years. So we think we can still provide quite nice organic growth there. Netherlands has as well finished the year with a good growth momentum. So I'm actually quite positive to see the operational business we run outside of Sweden. And that's the focus of us.

But would you consider Dubai as something else in these markets, or the focus is really on organic growth?

We don't close the door, but our focus is organic growth.

Thank you.

Thank you. We will now take the next question from the line of Nicolaas Magvi from DNB. Please go ahead.

Thank you. So a follow-up question on the cost and the remarks you made, Michael, on the trend in the Swedish branch operation. Yeah, I mean, there was an increase throughout the year in 2024, but if you look at the quarter towards the end of the year, there was a decline in the number of FTEs in the Swedish branches. So just wondering there if that kind of is related to some kind of central communication with the branches, or if that's autonomous decisions by the branches to take down the number of FTEs, and then looking more broadly over a number of years, we can see that You've reduced the number of branches in Sweden quite heavily, basically halved it since the pandemic, but the number of FTEs in the branches is actually up somewhat. So do you see more potential for efficiency improvements when it comes to the number of FTEs working in the branches?

So good morning, Niklas. As you know, the how to allocate resources within branch network is up to the branch managers. And they always adjust and adapt to current market situation and the demands for needs for customers. And if you look at Q4, you know, it's probably just a seasonality effect or that they actually just adjusted accordingly to their local markets. So it's nothing else. When it comes to the So if you look back a few years, yes, we are fewer branches now, but we still have more customers than we had before. So we need to take care of them. So that's why the staff is roughly around the same amount of people because they're customers to take care of. So that's how it works. They adjust and adopt. And so my My view is that from my perspective, I keep a closer track on the supporting business part of the bank and the head office business and resources that is needed in the market is primarily taken care of by the branches.

All right, thank you. And then a question on the capital. I think in earlier quarters you indicated that you expect a slight RIA reduction from BOSL4 here in 2025. Is that still the case? And if so, could you quantify approximately by how much do you expect RIA to come down now in Q1 from the BOSL4 implementation?

Yes, hi Nicolas, it's Carl. Thanks for the question. Well, yes, what we said is that we see over time fairly neutral consequences from BAL4 and we have no more information on that one. What we said in Q3, we said that we will have headwind from operational risk in Q1 but tailwind from credit risk in Q1 and then we will see headwind later on during the year from market risk components. So we have no more news on that one but we still think this is not impacting our capital planning as such.

Okay. Thank you for that.

Thank you. We will now take the next question from the line of Patrick Nilsson from Goldman Sachs. Please go ahead.

Hi, good morning and thanks for taking my question. I just had one on a more sort of structural aspect of the business. You print a return on equity around 14 and a half for 2024. You keep on finding cost efficiency opportunities in the bank and cost of risk remains low. So could you just help us understand where you think you can be operating in the long term? And are you happy running on a lower profitability than your Nordic peers given you have a more conservative risk profile or do you still want to be sort of above where your peers are despite being at the lower sort of risk profile and can you give some color of how you see all of these sort of cost takeouts materializing in the long-term profitability of the bank. Thank you.

Thank you, Patrick, and good morning. I think that's a good question of yours. I mean, we still have just one corporate goal, and that is to have superior ROE vis-à-vis our peers. We are pleased to see that we are reaching that one. With quite low margins. As you say, we have made quite a few advancements during the year. We have narrowed the gap to the switch, which has had partly higher ROEs. We are pleased to see the cost initiatives we made that they've actually put us on a much better footing. So right now we see our cost to income levels declining below our peers and that's all good. We definitely are pleased with the asset quality and we think over time having no credit losses is materially different to the cost level. So that we're pleased to do as well. We do think that we are in a good situation to actually reach our corporate goal going forward. We are pleased to see the strong footing we have in Sweden. We are pleased to see that UK, Norway, Netherlands are picking up to become the growth engines we've seen them be in the past. So I think it's down to you to make the analysis where we're going to be amongst the markets, but we look really positive to our situation.

Thank you very much.

Thank you. We will now take the next question. from the line of Tariq Al-Majad from Bank of America. Please go ahead.

Hi, good morning. One question from my side, please. Just back to the capital, and maybe that links as well to the ROE question from Patrick just before. So you decided to retain 400 basis point buffer, so 100 basis points above the 100 to 300 historical range. Can you understand what's the rationale for that, and when would you expect the next next time you would revise this target I think you had the line in your opening remarks that you would revisit that in the future thank you

Thank you, Tarek. Yes, you are correct. The dividend decision is still based on us being slightly below 4%, but very close to. We are pleased to see that we have a really strong asset quality and a balance sheet which can support us increasing the dividend with two crowns, actually. And we're increasing the ordinary dividend with one crown and the extra with one crown each. So that's a good situation to be in. Yes, we are pleased with our asset quality. We are pleased with our balance sheet. So this is just from a prudent perspective, we keep the 4%. We've said that we will come back continuously now. So you will get an update what kind of gap we keep to the regulatory demand quarter by quarter.

Okay, so it will be quarter by quarter, not on an annual basis. Okay, that's very interesting. Thank you very much.

Thank you. We will now take the next question from the line of Jens Hallen from Carnegie. Please go ahead.

Yes, hi, thank you. So my question is also related to your capital buffer and perhaps I hope you can elaborate a little bit more. I think over the last few years, we first talked about COVID for a reason to have a higher buffer, then Russia invading Ukraine, then high inflation, high rates and geopolitical risk. So, I mean, where we are today, are we ever going to have a world that's calm enough and predictable enough so you can operate within the range? And perhaps the question also said differently, do the rating agencies really require you to have the four percentage points above? Would you not be... one of the strongest banks in the world, even within your range. I'm not quite sure. I follow the rationale for keeping it at 400 now. Not saying you made it clear you would be there at Q4, but I think you also alluded to previously that you would then provide sort of an assessment on the ongoing requirement at the Q4 report.

Thank you, Jens. It's obviously a good question of yours. First of all, no. I mean, we most likely will live in uncertain times. Some crises abate and some new ones come. But being that one, then it's good to be Handelsbanken. I mean, we run the bank extremely conservative. We are where we want to be. And you know that we were close to six or perhaps above six down to our regulatory demands. somewhere if we go a few years back. So it's always been a question of how to move ourselves down towards the target range. There is absolutely no demand from our rating agencies. We've had throughout the real estate crisis, we've actually had really constructive discussions with them on a deep level and going down into all of our key metrics. And that has been really constructive and positive discussions. And we were obviously pleased to see them taking away their negative watch during last year. So that's all good. So it is still a matter of when and how we move ourselves downwards. And then we are obviously pleased to be able to pay out 15 crowns. We think that's really good. and still staying at nearly plus four. So we will come back in Q1 and continuously reviewing it forward.

Okay, but the plan is still to have a gradual decline, but perhaps not announcing it already with Q4 given the high dividends you already paid for last year.

We will definitely continuously review it. Thank you.

Thank you. We will now take the next question. from the line of Srivastava from Citi. Please go ahead.

Hi, thank you very much for taking my question. I'll stick to one. It's again, on this buffer, I thought it was interesting in the report you said it also enables you to have greater capacity to take responsibility for the supply of credit and to grow your business. Are there any, looking two or three years from now, are there any significant changes in business mix, product mix that you anticipate that would take up more capital or require greater capital buffers? And if so, what are these?

Thanks. Thanks, Shrey, for the question. No, we can't foresee any major changes in that aspect. Rather, on the contrary, I mean, we have an ambition to build capitalized income. And if anything, then we're going to decrease the density of the business model. We've also highlighted that going into first now the banking package obviously we see neutral effects and going into to ball four with the output floors we see fairly neutral effects of that one and that is obviously a consequence of keep running a very conservative bank with the best of asset quality. And if you look back now over the last 15 years, I think it's fair to say that the regulators has increased the capital density of the bank materially. So we are in a place right now where we think we are quite well suited actually for this. So no, you can't find the argument of keeping 4% as being a cushion for what we foresee going forward.

Okay, thank you.

Thank you. We will now take the next question from the line of Ricardo Rovebre from Mediabanca. Please go ahead.

Thanks for taking my question. Just a quick one. In trading, in the quarter, in the trading line, you mentioned other net gain losses and financial transactions. Primarily related to the ineffectiveness in the bank's hedging relationship as well as changes in the market values of derivatives used to manage interest rate and foreign exchange risk in the bank's funding increased to kind of 600 million. Could you explain, elaborate a little bit what this refers to and if there is any interconnection with the hedging you have on the NII? Thanks. And sorry, if you have already explained it, I had to connect with a few minutes of delay.

Thanks, Ricardo. No, I think we can follow your question, and I think you're correct in that one. I mean, running a large banking book obviously includes lending and deposit taking, but it also includes derivatives and securities. And some of these ones are obviously valued daily, and then it hits the NFT lines, and some of them are put in securitized chains or securities. That might not be the best of actually expressions, but we connect efficiency change where we have the hedging in place. And yes, you're correct that when rates are moving as much as they have been doing now for the last years, you are never 100% correctly hedged. And that creates volatility. So part of the NFT line is definitely connected to the NII line. But in essence, what we can say is you shouldn't extrapolate the net financial transaction line as it is running today. That is obviously a very strong P&L in Q4. And it has these kind of implications on the line. Hopefully that makes some sense for you.

Yes, yes, thanks. It makes sense. Just a quick follow-up on this. Over the past few quarters, if I'm not mistaken, the trading revenues are a bit higher than what we have been used to over the past few years in the context of your, let's say, risk profile. Could you say that this revenue line could be, in the coming future, a little bit stronger on average than historically? Or it's just, you know, it's just current situations that is particularly, say, volatile and generates, you know, what has happened in the past couple of quarters.

And thanks, Ricardo. No, first of all, I mean, you've heard us saying that We have made a lot of progress with our investment bank. We think what we've achieved over the last years is to make the investment bank gradually suiting the core client of the bank's needs. And in that aspect, I think we made quite a few actually progress on that one. So we do think that our NFT line is performing slightly better. Having said that, you have to focus on slightly. So still, we see we have no change in our behavior and quite a bit of the component of the NFT right now is out of a volatile character. So, yes, we have made progress and we're pleased to see that. And I think you are correct that if you look back over the years, yes, we are running at a better trend right now. but still a lot of volatility in the figures as well.

Very clear. Thank you very much.

Thank you. We will now take the final question from the line of Andreas Hakanson from SEB. Please go ahead.

Hi, thanks. Sorry, I just did one question before, so I just came back now. Just for modeling purposes, your discontinued operation had quite a bit of volatility in it. Could you just tell us what's now really left and how should we view that line going forward?

Thanks Andreas. Well we are pleased to see obviously that we followed through with the closing of the businesses. So what we have right now is you can see it as three components. First we have a real estate portfolio or housing co-ops rather. Then we have a portfolio of state guaranteed a bit longer loans. And then we have like a large corporate component in it as well. So all of these ones are for sale and we're working progressively towards them. So that's more or less what we can say, obviously. We are pleased to see the divestments we made and we try to work forward in selling all of these remaining components.

Okay, thanks. And then just another follow-up. On the capital side, you... You had an 81 that fell out about a year ago or something like that, and you haven't issued a new one. Would there be any connection between your willingness or running with the 400 bits management buffer before you issue another 81 or those completely unrelated?

Thanks for the question. No, I mean, the decision not to, it didn't mature in, or we did call it in March, and we haven't issued a new one. It is obviously very rational to not issue a new one, whilst we have as much seat to one as we do have. When and if we move into the target range, obviously, yes, we will have to decide the composition of the funding mix. So in some sense, you are correct. They have a dependency to each other. But it's not the reason why we keep the C to 1 ratio at plus 4.

Okay. Thank you.

All right. Thank you everybody for all the questions and we'll get back to you later. Thank you so much for now. Bye bye. Thank you everyone.