Swedbank AB (publ)

Good morning, everybody, and thank you for dialing in to Swedbank's second quarter 2024 results presentation. My name is Annie Ho from Investor Relations, and in the room with me is Jens Henriksen, Anders Karlsson, and Rolf Marquardt, our CEO, CFO, and CRO. Let's kick off with our usual presentation and then follow up with Q&As. So over to you, Jens, please.

Thank you, Annie. Swedbank has again delivered a strong result, and we are creating values for our customers and shareholders in both good and bad times. In an uncertain world, economic conditions continued to improve in our four home markets during the quarter. Household purchasing power improved in Latvia and Lithuania thanks to strong wage growth and falling inflation. In Estonia and Sweden, households are still cautious. Our home markets are well positioned for the future, with strong public finances and competitive firms. Indications are that growth in Sweden, Estonia, Latvia and Lithuania will be among the highest in Europe next year. Policy rates have been lowered by both the Riksbank and ECB, and looking ahead, we expect further cuts. At the same time, interest rates will remain high for longer. In these uncertain times, Swedbank delivered a strong result of 8.6 billion for the second quarter. Net interest income decreased by 3%, mainly due to lower deposit margins. Net commission income increased by 5% due to higher income from asset management and card provisions. Expenses increased according to plan, and we maintained a strict cost control, and the cost-to-income ratio was 0.35%. The temporary hiring freeze introduced in late April, as in June, resulted in that the number of employees began to decrease. we maintain a high rate of investments related to fighting fraud, improving our payment system, data and AI, and to IRB. Summing up, we delivered a return on equity of 17.5% and earnings per share of 7 kronor and 61 öre for the second quarter. A strong result. Swedbank has a conservative and thorough lending process. Our credit quality is solid, and during the quarter we reported credit recoveries mainly due to an improved economic outlook. We have a strong ability to generate capital and a strong capital position with a buffer of 5 percentage points. Our liquidity position is strong. Swedbanks works systematically and continuously to fight financial crime and reduce the risk of fraud for our customers. To further strengthen our work, the group function anti-financial crime was during the quarter integrated into group products and advice. This moves these operations closer to the bank's customer, product and service offerings with a focus on digital execution. To reflect the breadth of our work, the new unit is changing its name to Economic Crime Prevention. Our work never ends. But we are seeing the results of our intensified efforts, with customers now reporting a lower amount from fraud losses. The target of a sustainable return on equity of at least 15% is the foundation for our Swedbank 1525 plan. And the plan is based on four business priorities. First, we will leverage and continue to develop our proven business model. We will grow the share of wallet for existing customers. We will grow the business in prioritized segments. And we will improve our availability and operational efficiency. During the quarter, we were able to distribute nearly 1 million calls within our Swedish local branches through our new cloud-based communication platform. And the work to develop our new and modern savings platform has continued. We have now moved more than one million accounts and customers into the new platform. The new platform gives us better opportunities to support our customers to improve their financial health. Swedbank is the leader in mortgages in all our home markets in tight and tough competition. In Sweden, we saw increased demand for loan commitments during the quarter, and that is a sign that the market is slowly beginning to pick up. But the volume of new loans remains low. In Estonia, Latvia and Lithuania, demand for mortgages remains stable. During the quarter, we saw increased deposits in tough competition. And when the market changes, we act strategically and decisively. Our work to build a strong savings culture in Estonia, Latvia and Lithuania is continuing. Our ruble funds continue to be an attractive investment alternative. The Educational Foundation in Latvia started on our initiative, launched operations during the quarter, and Swedbank has contributed a first sum of 6 million euro. The Foundation's mission is to support initiatives that contribute to society's growth and development. the work being done in our new business area, premium and private banking, is producing results. Since the start of the year, the number of newly connected customers who have chosen the private banking concept has increased by 7%. During the quarter, we saw increased customer activity in the corporate segment. Lending volumes in Sweden increased, mainly driven by the real estate sector and large clients. We are selective, and our exposure remains in line with the bank's strategy and risk appetite. Corporate lending is performing strongly in Lithuania, and we are now market leading. This is a result of a sharper focus on both existing and potential customers, improved service quality, and customized financing solutions. During the quarter, we took another step in our Nordic strategy by partnering with the Finnish bank Aktia. We are thereby expanding the corporate offering in Finland in a similar way that we've previously done in Norway and Denmark. As you all know, sustainability is at the core of Swedbank's business strategy, customer promise and day-to-day operations. We have extended our partnership with the company e-Agronom and become a part-owner. Together, we are offering agricultural customers in Estonia, Latvia and Lithuania financing solutions for investments in sustainable agriculture. A sustainable bank is a profitable bank. Together with our customers, we can create a financially sound and sustainable society. And Swedbank cares deeply about financial health. And this means having financial literacy, a long-term savings buffer, income that exceeds expenses, and if you borrow, have mortgages and have insurance to provide financial security. With this in mind, it is gratifying to see an increased interest in pension savings in the shape of unit-linked life insurance. Swedbank Forsäkring is now the largest unit-linked life insurance company as measured by both premium payments and assets under management. And with that said, I give the word to Anders, who will deep dive, as always, into the financials.

Thank you, Jens. Let's start with the lending and the deposits. The loan portfolio increased by 13 billion, excluding a negative FX impact of 5 billion. In Sweden, total private mortgage lending was stable. While volumes are still muted, we are seeing positive signs in the mortgage market. House prices have increased over the quarter and transaction volumes year over year have improved. Total corporate lending in Sweden increased by 7 billion, mainly to the property management sector, and in the Baltics private lending increased by 2 billion and corporate lending by 3 billion. Customer deposits increased by 22 billion, excluding a 6 billion negative FX impact. Private deposits in Sweden increased by 12 billion and by 7 billion in the Baltics, positively impacted by income tax refunds. Corporate deposits in Sweden were stable and they increased by 4 billion in the Baltics due to temporary inflows from the state and investment institutions. Turning to the revenue lines, beginning with net interest income, which decreased by 3%, volumes impacted positively, while the net interest margin was lower. This was due to known trends, namely lower market rates, high margin corporate deposit outflows from last quarter, and higher costs from increased wholesale funding. The changes that we made in May and June on customer lending and deposit rates had a relatively small impact this quarter. In the Baltics, lower market rates impacted NIM negatively, primarily due to transaction accounts where we pay 0%. The higher wholesale funding costs were a result of higher outstanding volumes and the full quarter impact of a couple of capital and MREL issuance in Q1. The outlook for the economies in our home markets has improved, which will provide an opportunity for lending demand to return. Going forward, we will continue with our pricing strategy and actively work with our administratively priced core products on both sides of the balance sheet. Over to net commission income, which increased by 194 million, mainly driven by stock market performance within asset management and seasonally higher card commissions. Net gains and losses was strong and ended at 911 million, an increase of 230 million. FX and fixed income sales and trading performed well, contributing almost 700 million to the NGL. And there were positive revaluations from funding-related swaps. Other income increased by 160 million and ended at 991 million. All key lines were higher. Underlying net insurance income continues to improve, having offset the 84 million revaluation effect. Total expenses are developing according to plan. We started off this year at a higher investment and development pace, which continued into Q2. These include improving our omni-channel communication platform, further development of our IT infrastructure, including data and AI, fraud prevention and IRB. For the quarter, total expenses were 280 million higher. Salary increases for employees in the Baltics were implemented at the beginning of April. IT maintenance has increased as we experienced the full effects of recently negotiated third-party contracts rolling in. We paid out an endowment in Latvia of roughly 70 million. and FX increased expenses by 50 million during the quarter. Compared to our cost guidance, which assumed a neutral development, FX have added 100 million to expenses year-to-date, reminding you that this is net positive for the bottom line. For the rest of the year, you will see less fluctuations between the quarters compared to a typical year. Now over to you, Rolf, to talk about asset quality and credit impairments.