Hi, everyone, and thank you for joining us on Jyske Bank's conference call for the financial results for the second quarter of 2026. I am Simon Hagbart from Investor Relations.

With me, I have Jyske Bank's CEO, Lars Morch; and CFO, Birger Nielsen. Lars and Birger will walk you through our prepared remarks.

Afterwards, we will open up for questions. I will now hand over to Lars.

Thanks a lot, Simon, and thanks a lot for calling in. Earnings per share increased 12% year-on-year in Q2.

That is a result of business momentum and positive markets, cost control and share buybacks. We've also seen an accelerating mortgage growth, not the least due to new successful product launches, and we see that we are taking market share in this area at the moment.

We continue to see the benefits of increasingly customer satisfaction over the last couple of years. And we have again won best in private banking for the 11th consecutive year.

But we're also seeing improvements in -- across the bank. And it's also worth noting here that we are improving in the C&I area and in -- among institutional clients and have the best rating in that area that we've had ever.

Thank you, Lars. And going further on, until the -- looking into the numbers and figures for Q2.

We've had a very supportive environment in Q2, strong quality of our customer base. We've seen slightly higher interest rates and money market rates, and we've seen good activity and risk gone in the quarter.

So that all led to a satisfactory result for Q2. We saw a rebound of earnings per share from DKK 17 in Q1 due to the market turbulence back in March, now back to DKK 22 in Q2, the highest earnings per share in Q2 ever in an ordinary quarter.

In the P&L, the NII is almost on par with last year. up 2% quarter-over-quarter.

And the fee demonstrated -- the fee income demonstrated another good quarter on activity, 6% up over the year. We've kept a tight cost base and exclusive of one-offs, we are at index 99 or 1% down from last year, so fully on track.

Value adjustments saw a strong performance due to significant spread tightening of Danish mortgage bonds and loan impairment charges ended at 0 basis points. Looking at the strategic metrics, our return on tangible equity was well above our 10% threshold for '28 and the cost/income ratio at 47%, also above our long-term target of below 50%.

On the right-hand side, you can see the volume numbers, and they all showed an upward trend in the quarter. Asset under management significantly up 9%, supported by both private individuals as well as institutional customers.

Deposits grew 1%, bank lending grew 1%, mortgage lending 1% and leasing 2% up in the quarter. So a steady performance in all areas in the quarter.

Looking at the expectations for this year, we are well on track to deliver the DKK 71 to DKK 85, which we announced for the full year, and our expectations are unchanged as we speak. We have an earnings per share in the first half of DKK 39, actually the same level as we had in the first half of last year.

And looking at mortgage lending, we've seen that, that has doubled since the acquisition of BRFkredit back in 2014. But probably more interesting to the right-hand side, you can see that our growth continues, and we are, at the moment, gaining market share on the personal banking side and holding our position on the CIE and corporate side.

The personal customer product that we've launched last quarter has come off to a flying start. It's a very, very popular product, both among existing clients and among external new-to-the-bank clients.

It's the first product that really mixes the benefits from the bank-funded loans to -- with the benefit from the mortgage loans from the traditional mortgage institutions. So you have both benefits.

To the left-hand side here, you can see some of the flexibility that we've built into the loan. This means that we are acquiring new to the bank customers to a larger extent that we've done recently.

And this is contributing to the trend that we've had in the last 2 years, where our customer outflow has been smaller and our inflow has been larger so that we have a net positive inflow of personal clients, not due to this product, but helped also by this product. Another positive is our customer satisfaction when it comes to private banking customers.

We have now for the 11th consecutive year, been rated best among the banks here. And contrary to the past, it seems as if we are now capitalizing on this to a larger extent in terms of net inflow of new clients to the bank.

And if we look at the AUM development over the course of several quarters and years, you can see a significant uplift in our asset under management. And specifically here in Q2, we grew 9%, which was a result of inflow of both retail clients, but also institutional clients and certainly very good supported by inflow of private banking customers.

And if we look at the development, the long-term development from end '18 to the second quarter of '26, we've actually been able to deliver a per annum growth of average-wise 12% over that period. Then looking into net interest income in the P&L.

It's an important turning point for us here in Q2 after several quarters of a drop in NII due to the development in interest rates. We have seen the first hike from the Danish Central Bank here on the 12th of June with 25 basis points and market rates and forward rates have been trending upwards for some time now.

And if we look at the 2% growth in the quarter, it's driven by higher market rates, as I talked about, but also higher volumes, as I also referred to earlier. And -- but the strongest contributor is certainly deposit margins, which has been trending upwards over the last couple of quarters.

And the development in market rates and Central Bank interest rates are supportive also for higher NII going into Q3, where we'll get the full effect from the rate hike here in June. Our customers, in general, are in good shape.

And I think we see that clearly also when we look at the share of Stage 3 exposures that is at a record low level for the bank. So we are seeing that the customers are generally in very good shape and that they are now to the lowest extent that we've seen ever at a Stage 3.

So another positive in a world with a bit of uncertainty. We've had an extra eye on the agri industry, and we've seen no negatives on our book so far.

Thank you, Birger, and thank you, Lars. We'll now open up for questions.

[Operator Instructions] First question in line comes from Asbjorn Mork from Danske Bank.

So basically, 3 questions from my side. One on your NII sensitivity with the rising rate environment, what do you expect in terms of deposit betas?

And what do you have sort of as an assumption in your NII sensitivity, let's say, for the 25 basis points we already got and for an additional 25 basis points?

Yes. The NII sensitivity is around DKK 700 million for 100 basis points, as we stated a few quarters ago, and that still applies.

Yes. But what is the -- what do you expect in terms of your ability to improve deposit margins on not passing on higher rates to your deposit base?

And what is sort of implied in that sensitivity?

In the short term, as you saw here back in June, we saw no significant reactions from market participants. And that could also be the case in the next round if we saw another rate hike here in September.

Going on from there, of course, it's more uncertain.

So would you expect -- so if you take the DKK 700 million, would you expect that to be fading over the next 100 basis points, it's going to be a bigger sensitivity for the first 25 to 50 basis points, and then you'll have to pass on more for the deposit side?

That would be an expected outcome, yes.

Okay. Fair enough.

Then on your guidance for net profit for the year. So basically, you delivered DKK 2.4 billion already in the first half of the year, rising rates, strong AUM growth.

It seems like you are entering at least the upper end or high end of the range, if not exceeding it at some point. Normally, you've used the half year report to revise your guidance if you've sort of been on a trajectory towards the higher end.

You have -- you decided not to do so this time around. Is there any reason for this?

You don't think you're entering the high end of the range?

I think, first and foremost, there is no particular reason as to why we don't make any changes now. It's driven by the fact that the DKK 71 to DKK 85 interval is still relevant for us when we do a projection for the last 2 quarters of the year.

And if we look at what happened in Q2, we saw another quarter of a strong performance on trading income, and it is uncertain as to whether we can just replicate that. So some caution is relevant and to put in on that line.

But in general, yes, we will probably end in the upper half of the range.

Okay. Fair enough.

And I guess the average trading for the first 2 quarters of this year is not that far off from what you have guided as a normal.

That's correct. That's fully correct.

But the decrease in margins on mortgage bonds in the second quarter was very significant.

Of course. Yes.

Okay. And then a final question from my side.

You mentioned the new mortgage product. But when I look at market shares and volume growth, it seems like you might be losing a bit of market share in the corporate banking market.

So what are you seeing there in terms of your client momentum and competition, et cetera? Is it fair to assume that you're losing a bit of market share?

Yes, it's fair to assume. I think that's a historical issue in the sense that we saw heavily increased competition more or less suddenly creeping in a bit more than a year ago.

And I think some players in the market were very focused on volume. And we made a decision at that point in time that especially when it comes to CIE at low margins, we would accept not to be cheapest on all of those.

So we decided to stick to our good clients, keep them in-house, and we basically lost no clients. We have received the same number of clients as we have lost, but not participate aggressively on, in particular, new CIE lending.

I think it came a little bit as a surprise for us how heavy the price -- especially the price competition was at a certain point in time. When I'm looking at the flow at the moment, I think we are back to normal.

I think the bank is standing in a very strong position in terms of acquiring new business clients also. But it was a decision on the one hand, not to participate too much on price and credit standards.

And then I think we accept that in certain areas, we could lose a little bit of the market growth or not take the market growth. But I think we are well positioned to get back volume-wise on track here again, at least what I'm seeing from the front book at the moment.

But that intensified competition, was that sort of in anticipation of lower risk weights -- systemic risk weights for CRE? Hence, that was just basically in advance?

Or should we expect another round of increased competition now that we have seen the actual risk buffer coming down?

Yes. We are seeing a little bit less competition or aggressiveness in the competition now than we did a year ago.

And we can see that we can do well volume-wise and quality-wise without going to extreme low prices. If it was -- I think it's a fair assumption that it might have to do with the potential changes to the capital.

You might be right on that. It can also be volume targets or other decisions that I don't know of.

But it was clearly visible when we were looking at this in our credit committees and saw the cases coming in that like-for-like credits suddenly were priced quite a bit lower. And we then decided on balance, we do not need low ROE CIE business to a large extent.

We need good clients, and we need long-term relationships. And as I said, I think when looking at the front book, it actually looks okay.

Next question comes from Martin Birk from SEB.

I hope you can hear me. I guess, Lars, I'm sure just before this call, you took a stroll through your credit department.

And in order to prepare yourself for a couple of Q3 questions now that we are 2 months into Q3. Given everything that has happened over the summer with the short-term rates coming up somewhat, do you still -- do you see Q3 so far as a continuation of Q2?

So you're talking about it from a credit perspective?

Well, credit and, of course, volume perspective.

Yes. Starting with the credit perspective, I think our Head of Credit is still looking tanned after the summer vacation and is not getting paid.

He is in good shape, and we think our book is in good shape. And I also think it's fair to say that looking at the area where we could be a little bit concerned, Danish Agro, which is underweight in our book, and we basically don't see our customers being under pressure.

So we don't need to extend extra credits or anything like that at the moment. So they've been, in general, cautious the last couple of years, and they are in good shape.

So I think our credit department is in good shape. I think they're happy and pleased with what they're seeing.

And I don't think they are extremely concerned about a little bit of interest hike potentially in September. On the front book, I don't think that will change a lot either.

I think we'll keep on growing in the personal banking area where we have strong momentum. And I think the momentum is building in the personal -- or in the business and corporate area also.

So I'm not too concerned about those interest hikes.

Okay. All right.

And then just maybe keeping a tradition at bay, you are not concerned about your credit book at all. You also talked to that you're not concerned about the big exposure that you have in your balance sheet still and you report zero loan losses and still you maintain your management judgment roughly at 34 basis points.

Do you have any feeling to when that will turn?

I think we are well provisioned. I think what I answered here was how the book is looking at the moment.

I think some of the provisions we've done, we've done on potentially longer-term issues related to international economy and so on. We have not seen that materialize yet.

And that means we get closer a decision on what to do with this. So at the moment, the book seems in good shape from all what I hear and see, but we have money to cover the potential risks.

If they do not materialize, we will obviously communicate what we do.

And closer to take a decision, does that mean full year results? Or is it a '27, '28 thing?

Or how do you see it when you look out of the front window today?

Yes. Some of it could be earlier and some of it could be later.

It depends on what the reservations are done for. But we need to look at it at a yearly basis, they are done at different times during the year or the reservations are made.

Okay. And then maybe a question for Birger and coming back to NII.

Birger, could you -- in your head, could you please help us walk through the NII bridge going into Q3? I assume there's going to be a day effect and then what else -- how much is going to come from money market rates and central bank rates going into Q3?

Yes. I think that question may be even more relevant for Simon.

Simon, can you help us walk through your [indiscernible] into Q3?

Yes. So you're quite right, Martin.

We'll see a day effect of approximately DKK 14 million. And then depending on your assumption on the short-term interest rates, say, 3-month CIBOR increases 25 basis points.

Then based on our interest rate sensitivity, then that could probably entail that we'll see an increase of more than DKK 50 million Q-on-Q for the day effect and the change in interest rates. And then on top of that, of course, we could have a lag effect from repricing of bonds with semiannual interest rate resetting and then hopefully, also some continued volume growth.

Okay. And the plus DKK 50 million from higher rates, what kind of betas does that assume?

We use our normal assumptions in that area. So that would -- that has historically entailed a deposit beta of approximately 50.5%.

Okay. All right.

And then perhaps a last question on NII. I'm still curious to hear your thoughts on it.

NII growth according to consensus is set to be up next year by 3.5%. The year after that, it's only set to be up by 1.1% on my numbers, especially pricing in the forward curve, I'm looking at a number which is closer to -- which is just shy of DKK 10 billion.

How do you view your current consensus NII run rate?

Yes, I agree with the -- what I think you're insinuating that maybe there could be potential on the upside. I'm not sure all estimates currently are reflecting the current forward rates.

I doubt that. And also hopefully, we'll be able to grow the volumes also somewhat over the coming years.

So yes, we'll have to see. The next question in line comes from Alexander Vilstrup-Jorgensen from DNB Carnegie.

I have a few. So if we start with the bank lending growth figures in Q2, you delivered 2% quarterly growth or 2.3% year-over-year.

So it's an improvement from the recent trend. So should we view this as a new normal for Jyske Bank?

Or was Q2 somewhat of an outlier?

Yes, it's always a little bit difficult to say exactly how the numbers look. But what we can see for now and also I think I alluded to in my answer to Asbjorn, we see that the business side is in good shape.

And we think that they will contribute a bit more than they did last year. Then we have the effect of some of the mortgage loans coming from bank-funded loans to mortgage loans.

That will obviously take the bank lending a bit down. But all together, I'm slightly positive towards our momentum on the business side also compared to the market.

Okay. I also see that you managed to improve your customer satisfaction ratings.

To what extent do you see this as a driver of future lending growth going forward? And would you be comfortable seeing bank lending growth at around the current level in the coming quarters?

Yes. We follow the customer satisfaction fairly close, not in order to win different medals and so on, but in order to improve the way that we service our clients.

And I think it actually supports the flow of business. We will realize if we don't answer the phone, if we are too slow.

And if the tone is not good enough and so on, faster than following it through these tools. So for us, it's a management tool to ensure that we deliver a good product to our clients.

And if you deliver faster and a good product, then hopefully, we will sell more. We will not reduce prices to next to nothing to win medals here or doing other things that does not make sense from a business perspective.

So we actually go about this in a way that is focused on the business we deliver and the potential business that the customers can give us. And I think the underlying improvements that we have had during the last couple of years has supported also the momentum shift for us.

There's a lot of positivity within the organization. And I've been around lately to a number of different areas in the bank, also geographically.

And there's such a positive attitude everywhere and such a big belief in we have the right products. We have the organization is in great shape, and we'll do good.

So we are following this customer satisfaction because we think it matters in terms of turning business possibilities into business.

Okay. How do you see the competitive environment developing across both retail and corporate banking?

Should we expect pressure on lending margins from here? Or do we see pricing discipline improving?

I think we've seen quite a bit of pricing competition during the last year, maybe 5 quarters. I think it has settled somewhat on the level that we've seen now for the last quarter.

And we see less of those cases where we are looking at it and saying they're pricing this or they are doing this just to get the volume. We're seeing less of that panicking to get business in.

And we are seeing, in general, rational behavior in terms of pricing and also, I think, credit standards. That has been affected to a lesser extent than pricing during the last year, but we also see much less of that in our credit committee.

So we believe that it has settled somewhat and Asbjorn could have a good point in that some of the pricing was done on expected changes to capital.

Okay. Maybe just one last question.

If we just touch upon your core expenses. So what about the potential scale benefits from Bankdata as Group AL migrates to Bankdata over the next year?

How should we think about the potential benefits for Jyske Bank?

You should -- the benefits we will get when the migration is done and when it's done, we have a smaller share to pay. And the overall budget in Bank does not really increase significantly by getting new volume in, which means that our like-for-like costs will fall somewhere around 17%, at least that was our initial calculations.

We've not done new calculations on this. So that kind of benefit we will get from '28 and forward.

I think we've seen a little bit of benefits potentially already for routing some of the trading from the new combined AL via Bankdata that was formerly on the other platform, but that's minor, minor, if anything. But the benefits we'll see later.

Next question in line comes from Johan Ekblom from UBS.

I just wanted to touch a little bit on the cost side. I mean we saw better-than-expected cost development and you're talking about kind of seeing declining underlying year-on-year costs.

Can you talk us through what is driving that improvement? I think last quarter, you made a point about kind of embedding AI in your organization.

I'm guessing it's too early for AI to be the driver of that. But what's driving cost savings now?

Should we expect to see declining costs going forward? And then just to come back on the Bankdata question, the 17% reduction, is that on your overall IT expense?

Or is it on -- or what's the basis that we should apply that to?

Yes. If we look at the cost management in the group to start, I think if you go back in history, I think we've tried to keep a tight cost base quarter-by-quarter over several years now, and that still applies, of course.

When we look into what has happened lately and especially in Q2, yes, there was an uplift from low levels in Q1, but that was driven by some IT costs slightly up, negotiated wage increases and then some rental costs going up. But the overall aim for the group is to try to mitigate to the extent possible inflation in the cost base.

And I think that is what we are aiming for. And if you deduct one-offs here in Q2, you end up 1% down but it's also fair to say that if you replicate Q2, which was a very tight cost quarter, still you may be -- we may end up a bit too low longer term.

So overall, cost management is intact, flattish cost to the extent possible, but don't take Q2 as a sole replicate for the coming quarters. And when that said, still, bear in mind that we also have formally articulated that if we saw some business potential, we would certainly like to invest and AI could be one of these areas where we could see potential for investments and of course, to reap further benefits going forward.

And asking about the AI activities. AI is certainly on the agenda, is being prioritized, and we have put into place some very strong activities in the group, but the main chunk of benefits is still to be seen.

I think it's fair, Birger, to say that cost is under control. And as you're also alluding to, we are doing some defined extra projects that we are putting on top of our strategy related to AI and digital platform.

And I think what Birger is also saying here is that we want to make sure that we have room to do those investments if they make sense. And I think you're also right, Johan, in stating that the cost savings that we are seeing now is not AI related.

They are normal cost savings. On the AI side, I would say that the savings that we have is probably approximately the same as we're investing into the areas.

So that's probably close to net zero at the moment. Then I'd like to add also that Birger and his team has been working the last couple of years to get a new kind of cost discipline into the bank where we are focused on the total amount of cost that management at a certain level in the group can influence.

And normally, in the bank, there's a heavy focus on the number of FTEs, which is for good reasons because that's important and a big part of the cost base. But sometimes you forget the other costs.

And we've seen inflation in the other costs in the market in general. And I also think we see it with other banks.

And I think we've been able to mitigate that by the new ways of managing costs internally, and I think that would also be effective going forward. So we'll keep a tight eye on the cost here, but we'll also make sure that we have what it takes to make good decisions on investments.

And just maybe a quick follow-up. I mean if I look at the distribution of costs between the divisions, it looks like the mortgage business had a very large underlying cost increase.

Is that just an allocation of expenses? Or is there anything going on in the bigger projects or anything there?

Yes. There is nothing in particular related to that.

It's internal matters of distributing costs.

And next question in line comes from Mathias Nielsen from Nordea.

And most of my questions have already been asked, but maybe just a bit of clarification on the quite solid growth both on bank lending, mortgage lending and bank deposits this quarter. Like what is it that all of a sudden is working for you?

Like last quarter wasn't that fantastic? And how much of that growth is led by new clients, like new people coming into the bank compared to how much is just more business with existing clients?

If you could give a bit of flavor on that, that would be all for me.

Yes. I think what is working now is that we've been managing to change the organization a couple of years ago into the 2 main business units, and we've been working on getting the entire value chain to work across the bank.

And the organization in general have a year ago or something like that, started to believe in this. And when you get around, there's a so much positivity and so much belief in that we have the right position, the products, the decision power and so on in the bank so that the self-confidence is at a very, very high level at the moment, which is, I think, very good.

Then on the new clients, we have seen that with the new products that we've introduced and with the marketing that we've done earlier in particular earlier in the year and with the digital marketing that we are building the digital sales, we are building also we see that we are getting increasingly good leads. And we get that from employees where we get a lot extra applicants compared to what we did just 2 years ago.

I think it was 60% up per job last year, and it's some 30% up again on that this year. We see exactly the same on the customer side that we get more good leads coming in from the marketing and the work that is being done and from the new product.

So in the new products here, I'll not give you the exact figure, but the number of totally new to the group clients is quite a bit higher than what we're usually seeing.

Okay. So it is actually new customers actually driving a big chunk of the growth this quarter.

Is that how...

We have a net positive development on personal clients.

Yes. Perfect.

And then like maybe if I can add one more, given that next quarter would be halfway into your strategy period. And if I look into how you're performing on the numbers today and compare that to your targets, like with midway strategy, would that be a good time for you to update your targets to something that is a bit more ambitious than the existing target?

Or how should we think about that?

Sorry, when did you suggest, Mathias, I didn't get that.

So next quarter, I guess next quarter will probably be something in the midst of this strategy period and with the run rate you're doing or performing at the moment, like should we expect you to, at some point, maybe next quarter already to update your target? Or how should we think about that given that it looks a bit ambitious compared to your performance now?

You should expect that we are keeping on focusing on this, but also that we would like to have fairly safe ground -- be fairly safe ground when we do an update. And so far, our communication is that we do it by the end of strategy.

But obviously, we are following the performance. And we're also looking into some of the key things that we would like to be able to communicate to you guys when we at a point in time, adjust our targets and that has to do with projected capital levels and so on.

Thank you, Mathias. It seems that there are no further questions on line.

Thank you for participating in today's conference call. Please do not hesitate to contact us if you have any further questions.

We appreciate your interest in Jyske Bank. Wish a nice day.