TF Bank AB (publ)

Hello and welcome to today's webcast with TF Bank. I'm the CEO Joakim Jansson and the CEO of Mikael Meumütter will present the book series Communikén for 2024. After the presentation, you will hold your Q&A. If you want to call in and ask questions, press star 9 to raise your hand on your phone. You can also press star 6 to unmute your microphone when you get the word. You can also send in questions via the form to the right. With that said, I hand over the word to you, Joakim.

Thank you very much. Welcome everyone. We are now closing the year 2024 with a special quarter that has a report that deviates from the normal by the .1% of the previously owned 8-business Redem Capital. This follows a positive income effect on the result of 103 million and a positive capital effect on 345 million. And due to the transaction, the board will propose an extraordinary distribution of five crowns per share. The underlying profit per quarter is voluminously controlled by the growth level. We have managed to secure good margins and overall, it is a stable credit quality. Summing up the activities of the quarter, we get a good cost control, a final operational result adjusted for these extraordinary results in the context of the transaction of 188 million crowns, which is 36% better than the corresponding period the previous year. Above all, it is in the segment of credit cards and e-commerce that drives the EPS growth at the concern level. It pleases me that the revenues grow faster than the costs and the K-1 rate continues to improve. It shows that the business model scales well. During the quarter, we have seen a continued stabilization of the credit quality, but what you have to keep in mind when analyzing the credit loss rate is that TF Bank is under strong change for several years, both in the form of business and geographical mix. Then we have a macro in Germany that works against our underlying improvement of credit quality in that market. But now we are through a December that has many red bars at the end of the month that breaks the normal payment pattern and also January, which is the most difficult month for households. Can we turn the page? Here we show growth in the loan book, exclusive change in the volume that was included in the redevelopment of Red Am Capital. And if you sum up that way, we get our underlying organic growth in local currencies at 6%, every year it was 17%. The credit card TF Bank's growth engine grew by 8% during the quarter and 48% during the year. E-commerce grew by 8% during the quarter in local currencies, but decreased every year by 7%. The decrease should be seen in the light of the fact that the businesses in Poland and Balticum are in runoff and the increase in the last quarter is a normal seasonal pattern where the last quarter of the year is growth-wise strong. Consumer lending grew by 2% during the quarter in local currencies and 4% year on year. Can we turn the page? If we look at the market, we can start with Germany as the geographical core in the growing part of the Bank's credit card activity. We have set a record strong demand on TF's credit card. We expect a strong volume growth during the coming quarter. Germany is more than a third of the Bank's loan book. In the German market, we have launched this year Avarda's credit offering, initially for Nordic traders. Apart from the fact that it gives a start in the German market, we are also a strength for our sales in the Nordic market, when Germany is an attractive market for Nordic traders. The credit card activity in Norway continues to grow well. In Avarda in Norway, we have now, in January, signed an agreement with Brandstahl Group. It gives a strong reason for our Norwegian business to partner with such a strong trading platform. In the rest of the Nordic countries, the focus is on maintaining the profitability and credit quality in the consumer loan business. We have continued to consciously keep the volumes in the consumer loan in the Nordic countries to ensure good margins. The same profitability focus as in the Nordic countries applies to Estonia, Latvia and Taunia. In all three Baltic countries, the credit quality is stable and we are working to optimize the portfolio for a maintained and strong result. In Denmark, we have now come to a point where we feel more secure with our loan. We are safe with the credit quality and our ability to find the right customer at the right cost. It has taken a few years, which is normal, and we feel that we are ready for the next phase when we scale the business in a little faster pace. As mentioned earlier, we have already established a credit card in Spain and Italy. It is the beginning of a journey to learn from these markets which are large and interesting from a longer perspective. Can we turn the page? Now we are looking at segments and segments, and we start with credit cards. The loan portfolio in the segment is now over 8 billion and the underlying business in the segment is growing by 48% compared to the same period last year. We continue to grow in the form of a number of new credit cards. Summing up the year, we grew in Germany with 183,000 credit cards, which is an increase of 31% compared to the previous year. We also see an improved credit rate in the segment, which shows that the business scales well. In this case, when we grow so much, the end result is that the credit rate is very valuable. And in the second half of the year, we have launched the product in Spain and Italy. Now we turn the page. Within the e-commerce segment, we now see the effect of one of our strong pipeline in the new sales that we have talked about earlier this quarter. We have signed a deal with several large traders at the end of last quarter. Now, as I said, we are signing a deal with Brandstad Group, which is a leading e-commerce in the segment. Through these new business, a good growth is guaranteed over the coming year. We estimate a loan volume of 1.9 billion when they are fully built. We know that the trade has had a tough year and the negative growth is also an effect of the Baltic Compows having new business in 2024 and then earlier, the Polen business in runoff. It contributes to the negative growth in the segment. With lower growth, however, we get full expansion in profitability. And profitability is therefore very strong, despite the trade having had a tough period. And as I said, we have launched the Avardas credit offer in the German market and we are aiming at Nordic traders. Then we turn the page. In the consumer lending segment, we have continued to keep the growth rate down with a focus on defending the margins. As I presented earlier, we are restrictive to monitor the credit quality and that means that we have continued strong revenue in the segment. We also see a general stabilisation or even an improvement in the credit quality in the segment and that applies to all markets. We have finished the quarter by testing the Swedish market again, but it is still too early to draw some conclusions about how that test will turn out. Now I hand over to Mikael for the continued presentation. Great. Thank you very much.

Yes, we turn the page. So we first look at our moving revenues. We can see that they rose to 657 million during the fourth quarter, which is 20% higher than the corresponding quarter of 2023. And the main driver behind the increases is continued growth for the loan portfolio within the credit card segment, but also a higher margin of revenue within e-commerce solution has had a positive effect. If we look at our credit losses, they rose to 186 million during the fourth quarter, which is 20% higher than the Q4 of 2023. And earlier in the quarter, the concern's credit loss level was affected by a mixed effect, because with our growing credit card segment, we have a higher margin of revenue and a higher credit loss level than other segments. I would also like to point out, just as Joakim was saying, that since we now have a 1.5 billion in the loan in December, both the margin of revenue and the credit loss level have increased somewhat in Q4 because the balance in the calculation is higher. However, this does not affect the risk-adjusted margin that we see is stable compared to the previous quarter and even has an improvement compared to Q4 2023. And with that, we can move on to the next page. And here we can look further at the bank's moving costs, and we can see that they have increased by 11% to 245 million crowns during the fourth quarter. The concern's credit loss in Q4 is 3% lower than the corresponding quarter of 2023, which shows the share in business models. If we compare it to the third quarter, it is important to remember that the semester period always involves lower costs for, for example, staff and consultants in Q3. But I would also like to mention that during the fourth quarter, the concern's costs are also charged of costs related to the RDM's operations, such as the 20th of December, when it was withdrawn from the bank. As you can see in the diagram, the KU-data for the credit cards segment has come down to 32% in the last quarter. The positive trend mainly depends on the share in business models, but I would also say that part of the improvement is due to the lower direct market costs that we had during the first quarter. If we look at our second segment, e-commerce solutions, we can see that the KU-data is up to 58% in Q4. And here it is that the business model for e-commerce solutions means that the KU-data is higher than for other segments. But it is compensated quite strongly by the fact that we also have a higher risk-adjusted margin. If we look at our third segment, consumer lending, we see that the KU-data has gone up to 33% in the last quarter, which is slightly higher than in Q4 2023. And with that we can move on to the next page. Here we can look further at the bank's moving results. Just as Joakim mentioned, it increased by 36% to 188 million during the fourth quarter. And the driving force behind the growth in profit in the -on-year is still mainly increasing in the moving revenue for growth in the loan portfolio, which we can see in the credit cards segment, but also the powerful improved moving results for e-commerce, which also has a positive effect. And also, as Joakim mentioned, in our results for Q4, we also have a positive effect of 103 million, which is related to the shareover with Alektum and Erik Selin. And this post does not affect the moving results, which means that our underlying profit growth in the quarter is 36% -on-year. Excluding the positive input effect in the result calculation, the bank's adjusted withdrawal of the capital increased to .3% during the fourth quarter and the profit per share increased to 623 euros. The profitability has been strong, I would like to say, and during the second half of the year, and we are in line with our financial profitability measure. If we move on to the next page, we will continue to look at the segment. We will start with credit cards and look at the moving results, which increased to 75 million in Q4, which is a total of 66% higher than the corresponding quarter in 2023. Again, higher income from the growth in the loan portfolio and shareover, which gives a lower rate of contribution to the segment's withdrawal in the loan portfolio and increased to .8% in the quarter. And as we mentioned earlier, the credit card was launched in Spain in Q2, 2023, and in Q3, 2023, it was launched at the Italian credit card. But as always, when TF Bank launches new products, we will be careful and grow in control. If we move on to the next page and look at the segment E-commerce Solutions, the moving result increased to 33 million in the fourth quarter, which is 91% higher than the corresponding period in 2023. And here you have the income margin which has improved significantly in the last year and the positive trends continue in Q4. And the segment's withdrawal in the loan portfolio increased to a strong .8% in Q4. During the fourth quarter, the segment's credit losses have decreased slightly and the credit loss level increased to .7% and here one should say that more parts of the improvement would like to show is related to the fact that we have introduced credit restrictions in the Nordic region. If we move on, we look at the segment consumer lending. Here we see a moving result of 80 million in Q4, which is 5% higher than the corresponding quarter in 2023. And comparing the result with Q3, 2024, it is important to remember that Q3, which is always affected by positive seasonal effects, as I mentioned earlier. The loan portfolio and the risk adjusted margin have been stable during the last year and the segment's withdrawal in the loan portfolio increased to .6% in Q4. If we move on and look at the bank's financing and liquidity, we see that the loan balance in Germany goes up to 16.8 billion at the beginning of the quarter, which is 79% of the total loan of the company. And to increase the geographical diversification in a cost-effective way, we launched at the end of 2023 some loan products in the Netherlands, and there we have a loan balance of 2.8 billion. I would also like to mention that in the beginning of the quarter, the share of the fixed interest account rose to 70% and the relatively high share of the fixed interest account you will see in the light of the fact that we have previously built up a NPL portfolio, which in terms of a interest risk perspective has then matched with the loan with longer run times. And the current liquidity reserve rose to 19% of the loan balance at the beginning of the quarter and more of the liquidity reserve is as previously placed in the state development, with a remaining run time of up to six months. I would also like to mention a little about the LCR or the NSFR, which rose to 406% respectively 109% in Q4. And as we also inform in relation to the Q3 report, we have already provided the financial inspection interpretation for the loan through the loan transfer that came at the end of September last year, and that our NSF has still reduced something compared to the three quarters, depends on that we have taken business decisions to optimize the financial costs and minimize the negative arbitrage. If we go further and look a little at our capital relations, so these have increased then naturally strongly in Q4 in light of the fact that we then increased .1% of the shares in the Dotttobloid 3DM capital. And the positive capital effect has risen to 345 million in Q4, but from this balance we have then withdrawn 107.5 million in the capital base, which is then related to the extra distribution as the board proposed to the annual balance of 2025. And as we communicate in press reports, September 2nd also includes the share price of the loan agreement with Alectum, EGCELIN, even more transactions. So in the next step, it is then up to the bank to cancel its annual income in DTM to Alectum in exchange for a minority owner in Alectum of less than 10% as previously communicated. If we look at the ratio numbers, we can see that the capital capital relation has risen to 13.3, the capital capital relation to 14.7 and the total capital capital relation to 16.7. And we have thus a significant distance to the regulatory capital on all three levels.

And

with that I leave you Joakim.

Thank you. When we look forward, the conversion of the bank continues. The T-Bank is now more of a European credit card and payment platform, much less of a Nordic construction loan institute. During 2025, we are now preparing ourselves for a number of new partnerships with large traders. Within the credit card business, we have had an ambitious plan when it comes to new card customers. And it should be seen from the perspective that we, per year, had 360,000 active cards in the segment, which was an increase of 50% since the year before. During the quarter, we have entered a deal about the sale of about 80% of shares in Reddm Capital. This means that it will take at least three years before a significant backstop of capital will have to happen. And now we follow Reddm Capital as a minority owner and the company is preparing for the next step in the transaction, where our 20% in Reddm will be changed to 10% in Alectum. We passed a loan value of 20 billion during the year, which was a limit in our current financial goals. On the basis of what we expect from a pillar two management, from the financial institution, no new goals are presented here and now, but we have decided to come back to this question during the first half of the year. And after announcing a credit card in Spain and Italy and Avarda in Germany, we enter a period where we build competence in the relations in new local markets. And in Denmark, where we have been for about two years, we now feel increased control, which gives us confidence that we can now start scaling the business in a smooth pace. And this work set puts a finger on how we constantly strengthen the geographical profile of the bank. Then we move on to the Q&A.

Thank you so much for the presentation. And as you mentioned, we go into the Q&A here. And have you called in and asked a question? Press star nine to raise your hand and star six to unmute your microphone. And the first question is asked by Jens Hallén from Carnegie. Here you go, you have the

floor. Thank you so much. I hope I have managed to unmute and all that. First question. Mikael, you mentioned that there was some cost in Q4 for Redem. Can you specify a little bit how much it was? Is it one million or 10 million or 20 million? What should we think?

Yes, I can take that. I can go through three rows that have an impact on Redem. We start with the end you asked about, the costs. And then you can say that 10 million in Q4 is completely equivalent to Redem, which means that they disappeared, more or less, on December 20th. So you can have that with you. And then there are also revenues on the tax rate, which goes up to 30 million. That is both income tax and paid income tax. But then we also have the rental cost on 30 million, so the net is actually zero. But you can think about that when you brush in your estimate forward that the two will be affected.

Exceptionally, thank you very much for that. Then another short question. The provision method for the business was about four million positive here in Q4. It's an improvement compared to what we've seen earlier. So it's a bit like when you start to multiply everything by four. How should we think? Is this something we should extrapolate now in 2020-2025, more than an improvement that has happened? So it's like the foundation in the business?

No, I wouldn't really want to assume that, because this is a bit volatile too. So brushing in four all the way, I would have wished, but I don't think it will be the case. Without it being a bit volatile, then I think we'll get a net that is positive all the way. But don't brush in a few four million every quarter, because that won't be right. It's a bit fluctuation in the season too.

But if you can push that a bit, I think it will be a positive number all year round. So it will be a pretty big improvement compared to 2024. Yes, we believe in that. Okay, I noticed. A little more specific question on e-commerce solutions. You mentioned that you have gotten some new traders. It usually comes to the cost first, and the income later. One, is that correct? And two, is it a remarkable cost? Is there something you should have in mind when you try to put our estimates here for 2025?

Yes, so the model itself is in the middle of the process of building volume first. Then you come to the cost, and then the credit volume, and then the income afterwards. And of course, if you look at the segment during the previous years, when we've had a negative growth, then we get a very strong profitability in that segment. Now we're going through a period where we will increase the growth and come up with positive growth, and the general pattern should also be a little more positive than it was before. So as a whole, we're now entering a period where we will grow more and profitability will come down. So in all other ways, you can expect that we will take costs upfront, and then the income will come over time. And then depending on how strong the growth is, then you will have to balance it out. So it is completely reasonable to expect that the profitability in that segment will go down during a period when growth comes.

Perfect, and then one last question, which is also a little more technical. With the transactions with Red Jam, are there any credit losses related to the transaction that is in your reported credit losses, or are they completely separate? So what is reported is what was underlying?

The short answer is yes, but I would like to develop so that you understand this, because you can think about what I said, then Red Jam should go with a loss, and that's not true. It's just that now it's also a little technical, but when we calculate our ECL models, we have to use the original loan rate for discounting. And Red Jam as such, of course, uses its discount rate as a discount, and there you have a discrepancy, which means that you get more income than we do, but since they have kept in the concern, then it is our numbers that matter.

And of course, when you make a transaction like that, when you clean out everything you have in a number of markets, of course, on the margin you find some here and there, which you have to clean up, but it is nothing that is affecting, but there is a certain effect of a little clean-up, but it is quite small.

Thank you. And I forgot, I have one last question, sorry for all my questions, but first of all, do you have a deal with Red Jam that when your loan goes to 90 days, it will be a material discount or sale of the loan, or the ones that are given to the funders, or will it be more of an ad hoc solution?

We act as two completely separate companies on business-based conditions, and then there are parts in this SPA that make us sit together for a while, but in principle, one can expect that since the NPL market does not get on, then we will build NPL volumes again, that is what one can expect. Then we will act actively to keep the NPL volumes in check, but there is no industrial cooperation in this way.

So it will be something between your old clean balance sheet with zero, to the point that you may have to build a little bit and then sell it instead?

Absolutely, then you do not know where the market is taking off, but we will act on business-based conditions, and I expect that Red Jam Capital will do that. Thank you very much, that was all my questions.

Thank you very much for the questions, then we will go on and give the floor to Emil Jomsson from DNB.

Good morning, thank you very much. I wanted to start by asking about the credit card segment. I noted that the credit losses in crowns were up by about 20% compared to Q3. Could you explain what it was about?

Yes, absolutely. In the underlying, it is of course a growing balance, but that does not explain the whole thing, but we have an effect of two things. First, we have an underlying macro in Germany that works against us. When I mean working against us, it is like this. If you look at our new generations of emitter credit cards, they have better credit quality than the old ones, which is completely natural when you are established in the market. So we have a underlying trend that the credit loss levels in Germany will decrease, but against us here and now, the macro is working against them. And then we have especially during the fourth quarter, with the number of days being very much in the end, which also has a certain effect. So there are three explanations. Volume growth, macro that works against us, and then the December effect.

How do you feel that the dynamics look now on credit card rates? Do you still see underlying credit costs coming down more than the debt rates?

When it comes to the funding, yes, now they are roughly in parity, I would say. Mikael can perhaps develop that.

No, absolutely. We have a rather slow rate of funding in that way too, so we have a lot of fixed interest in the account. Then we just have to think, Emil, when we count on the interest in the debt, then there is a redem there, and then you can actually believe if you count the rate, that we go up in funding, but that is not the case, but if I remove redem, then we are quite stable in our funding costs. So we are going down gradually, but it does not go very fast, because we have a rather slow book on the funding side. But otherwise, we are going down gradually.

And when it comes to the interest rate on our loan volume, there are different market for market, product for product, and there are also different generations of loans. So it is not easy to give a simple answer to that. But generally, you can say that after a while, when it starts to slow down, the cost of the fund will go faster than our loan interest rate decreases. But given that we have so much fixed interest, it takes a while before we get to that point.

Alright, what has been your first impression of the credit card business in Spain and Italy so far?

As always when you enter a new market, you are hit by a norm of selection. So it is nothing unique for these countries. But of course, the connoisseurs who are in the market, those who are looking for one, so that is why we are so incredibly slow. You can look at the credit exposure, how much we are in balance. You can see the decrease in the whole of Spain, and you can see how much we have in Spain. Or in Italy, you can see at the end of Q4. We are going extremely slowly forward. And that is precisely because we have to wash off this first wave. And it can often take half a year before it is clear.

I was also going to ask about the timing of the new financial goals. I am thinking about how they will come out in Q1 or Q2. Is it completely dependent on when you get the petrogyn?

It feels a bit unbearable to go out before you actually get it. So it feels, to be on the safe side and to pick up the ball right, it feels like we would like to have it and be able to have a discussion from there.

Will you share the test when you have got it?

Yes, of

course. Alright, that was everything I had in mind. Thank you very

much. Thank you. Thank you very much. Then we move on to the word to Patrik Bratselius from ABG. Here you go.

Canon, a short follow-up question first from Emil's question. How sure are you that you will get this pillar 2 guidance before June 2025?

I have never been sure, but I mean when the inspection starts a process, they usually want to clarify. So from that perspective, I feel pretty confident that it is not rocket science. They have a way of working on this. This is what they do every quarter and minute. So I have all expectations that they will be able to do it in the near future. Maybe in the first quarter.

Okay, sounds good. You have previously not been overly enthusiastic about the Swedish consumer loan market. You often point out that competition has been quite tough. It has led to low risk-adjusted margins. But now you are raising the bar that you are starting to grow with some new loans and start testing the market again. What is it that you see differently right now and can you develop that?

Well, you could say that we are still not overly optimistic about the Swedish market. It is a tough competition and we have a number of actors who are aggressive in the market and have a good business. We also see that we have new tax rules that come in during the year. We come from a period with a very tough macro. So from that, here and now, everything is wrong. All stars are wrong in the sky. And then we might be just about to test and double the tone and see where the markets are. And to work from that position, because it probably can't be worse than where we are right now. We have done a lot of volume here and it is more to feel where the markets are. You have to consider Sweden as a new market for us when it comes to this product. So it is not at all that we should throw ourselves into this. But from a more structural perspective, you can say that for our Nordic business, Sweden is a relatively large country. We are low on volume in Sweden compared to Norway and Finland. So from that perspective, there is potential in the Swedish market. But as I said, and as you pointed out, we are not driven by being big in any market. We are driven solely by our profitability when we have all our capital. So it is about that Sweden can prove itself in the competition in TF Bank. And then it is important to have a profitability of over 20% to be able to get capital allocated to you. So it is hard to see, but the answer to that will not come during the next quarter and maybe not during the coming years either.

Thank you. And then as a last question, a little follow-up on a previous question about rental rents. Can you talk a little about how you see the competition in the different geographies and you see that in some markets the rental rents have come down faster while they lag behind on others. So that some market would be more attractive for you to fund you forward. Do you see any of those signs and is there anything you can share with us?

Generally, one can say that the large rental markets are quite professional. And there is a structure on the market that cares about the rental levels you have. Which means that if you compare Germany and the Netherlands, they are at a pretty good level with each other. We have noticed that when we have entered a market like Ireland, for example, it is a completely different level. But then you can not get the same volume. So it is about the advantage you can have in certain markets. And that is what is known by a number of large banks that keep rental rates very low. Then you can get that. And such a situation was during 2024 in Ireland.

I can just add one last thing. Just get fresh data here. And it is actually that you see a little clear sign at least that the rental on the market is on the way down in Germany. Because we have made reductions here in the days, so you can get fresh data.

Okay. And do you see how competitors have possibly changed their rental rates against customers or are they still there?

We see no ... Now we are working in so many countries. And then you can say, if we think about products for that part. But if you look at the credit card market, there are actually no trends in reducing rental rates. But when it comes to the consumer loan market in a number of countries, we see that the price level is on the way down. And it is directly followed by sales costs, but also an improved macro. And then it is of course also dependent on what capacity the local market has to lend out. So the consumer loan market in general is a little more rental sensitive than what you are in the credit card market. And the same applies to e-commerce as well, which is at the credit card level.

I understand. Thank you, but then there are no more questions at the

moment. Thank you very much. Then we move on to the word to Johanna Servenka from Finansfors. Here you

go. Good morning. Do you hear me?

Hey, Massam, we hear you.

We hear you, Johanna.

Toppen, I was going to ask if Joakim can maybe respond a little about the scale distributors that exist in the credit card market in Germany. And can you do more to reduce the costs in the context of expanding?

Absolutely. Yes, but it is so that I can just point out that we have a pretty big, we have a very large number of credit card distributors in our measured call center on the border between Germany and Poland. And during 2023 and early 2024, we grew that business very much. And then you can see that we have basically doubled our business in the last two years. And we do not grow at all, especially much more now in the number of employees, but with the help of automation, AI and in general process improvement, of course, we have to handle a new customer all the time without adding more staff. So that is one core of how scale distributors are coming to this market. And that is what I also judge, that when we grow more, of course we will need to go up a little bit in staff all the time to cultivate our business and also have capacity and have a good service level. But there is a great potential that we notice.

Thank you. And then I'm a little curious about this whole overview from the finance department. If you can just give a short comment about your expectations about what they will give you and also what you have decided today, both regarding the total risk exposure. And if it is correct, if I read correctly, that you have not seen anything more in the -way-lead.

So now I'm going to say it right here, but we have an internal goal today, or way leading from the board, which we have put on 150 points. So we have that all the time. So we have that. And I don't think Bruttosoliditets is an issue. Micah, what do you say?

No, absolutely not Bruttosoliditets. But I will answer your question. Today we have in the report .1% that is related to conservation risk and tax risk. And that is the P&L 2 requirement that FI will come with. And then they come with a guidance. If the guidance is not known, the P&L 2 requirement would be very strange if they come with something else, because we have calculated according to their models. So we have already taken note of that. It is already with us and has always been with us.

But you said in 2021 that you expected increased capital requirements through P&L 2 way leading. Is that picture still correct?

What we said in 2021, I don't remember it. Today we have a guidance in our financial goal, which is .5% units above the regulatory requirement. What FI comes with P&L 2 guidance, that's what we're waiting to see. So I don't want to speculate where it will end up. As Joakim mentioned earlier, as soon as we get it, we will send it to the press. But on the other hand, I am quite convinced that the requirement that you have, you have to differ on guidance and requirements. We already have the requirements today, and I'm pretty sure it will land in where T-Pank actually has today.

And then I'm a little curious about just if you can respond to the level on your NSFR. It has steadily decreased over the past few years. What does it depend on? How should I interpret it? Is it related to the new requirements from the financial inspection?

No, not at all. It depends on how many years. We introduced this, we took this position in 2023. And as I also said on the call, why our NSFR right now is at 109%. It has to do with business decisions and that we optimize financial costs and minimise negative So it was no news for us, what the financial inspection came out with, because we have had that guidance all the time at T-Pank, only since Q1 2023.

Thank you so much. Can you just briefly respond to the risks on the German market when it comes to credit losses? What do you see there? Is there an increased risk that you will see in Q2 increased credit losses?

No, we have a trend with a strong growing book and we have had it for several years. Despite that, we have underlying credit quality under control. When we look at different generations of credit, we see that the credit cards we have gotten out on the market in the last few years are of better quality than we had earlier, which is normal when you get into the market and learn over time. We also see that we get a risk-based margin in this business that looks good. Then Germany is in a special macroeconomic situation, and the German economy is in need of tax cuts. Especially when you think of households. But underlying, it has shown to be quite stable over time. It is difficult to say about the future, but what we can see today is that there are no signs of major changes underlying. It is just these trends that I mentioned earlier. We have underlying improved credit system, but against that we work macro.

Thank you so much.

Thank you. Thank you so much. Those were all questions from the interlocutor. We have time for one question here, which has come in written. What similarities and differences do you see in the credit card in Germany compared to other European countries? Are the plans to start up Avarda in more European countries?

It has to go from business case to business case. What is special about Germany is the interest of our customers to establish ourselves there. It is a natural development. Then you have to see what the future has in store. It is also about how our customer base develops over time and what it becomes natural for us to grow further. But it is quite clear that an e-commerce business is more partner driven. You cannot just establish your market and look for customers when you have private customers as end customer and you meet them directly via platforms. There is a different logic in this business. You can see that our business is fully focused on partnerships with large traders. With this approach, you can imagine that we will have more customers over time and a greater international presence. If we are able to develop together with them, it is not entirely unlikely that we will build an e-commerce business in more countries.

Thank you very much. One last question. How do you use your affiliate marketing and do you see it as a good way to attract customers?

Yes, it is one of our tools that we use. We work directly with customers, but with such a marketing manager we work with partners. We are both digital and physical partners. We work with the tools that are in front of us. It is always a decision how we should act in the market to get the lowest cost to attract new customers.

Thank you very much. There have been a lot of questions, but we can't answer them all right now. Thank you for all who have called in and asked questions. With that said, I would like to hand over to Joakim for some closing words. I

would like to thank everyone for your attention and wish you a good day and a wonderful day.