Good morning, everyone, and welcome to this presentation of Handelsbanken's results for the fourth quarter and full year of 2025. The bank reported a solid fourth quarter with net profit from continuing operations up slightly compared to Q3 and a return on equity of 13%.

The savings business continued to perform well with strong inflows in customer savings. Asset under management reached an all-time high in our home markets.

Household lending has started to grow again in most of our home markets, and in the UK and the Netherlands, we now have also seen several quarters with steadily growth also in corporate lending. All in all, the income increased in the quarter while the normal seasonal seasonal tick-up in expenses was fairly modest.

Asset quality remained very strong, and we added yet another quarter with net credit loss reversals, bringing the consecutive count to eight quarters in a row with net reversals. Given the solid asset quality and strong financial position of the bank, the board proposes a dividend of 17 kronor and 50 öre per share to the AGM, of which an ordinary dividend of 8 kronor per share and an extra dividend of 9 kronor och 50 öre per share.

The CET1 ratio of 17.6% was 2.85% above the regulatory requirement. In other words, the bank is now back again in the long-term range of 100 to 300 basis points above the regulatory requirement.

Now, if we look look closer at the financials of the fourth quarter compared to our previous quarter, RoE amounted to 13%, and the cost-income ratio was 41%. Operating profits were down marginally, but net profit from continuing operations increased slightly.

Adjusted for currency currency effects, the NII declined by 3%. The drop was was explained by negative margin effects due to lower short-term market rates and by a year-end calibration of the deposit guarantee fee for 2025.

Fee and commissions increased by 5% and were driven primarily by continued strong net inflows into assets under management and positive stock market develop boosting the savings business. The NFT increased somewhat, and over other income, sorry, was supported by VAT reassessment in Sweden and Denmark of around 200 million.

All in all, the income grew by 1%. Expenses usually increase some in Q4 as the activity level is always higher after the preceding summer quarter.

The increase of 2% was, however, relatively low compared to in previous Q4s, which reflects the increased cost focus in the bank. Net credit losses amounted to 5 million.

If we switch over and look at the full year of 2025 compared to 2024, RoE amounted to 13% for the year, and the cost-income ratio to 41.5%. Adjusted for currency effects, the NII declined by 7%, again mainly as a result of the material cuts in central bank policies rates policy rates during this year, affecting the margins.

Net fee and commission income, on the other hand, remained resilient and increased by 2% adjusted for FX effects. The key contributor was again the savings business.

The NFT was down due to temporary negative effects in the second quarter in 2025. All in all, total income dropped by 9%.

Expenses at the same time dropped by 7%, and when and when adjusting for the FX, restructuration expenses, and Octogonen, the underlying decline was 3%. The reduction of the running cost base in the of the bank came as a result of the initiatives carried out over the year the last year and a half.

This enabled the bank to counter general inflation and annually annual salary increases by a wide margin. Net credit losses reversals amounted to 313 million compared to the 601 million a year ago.

All in all, the underlying operating profit was down by 12%. Now if we take a closer look on the NII development compared to the previous quarter, as said, the NII dropped by 4%.

Over a number of quarters, we have seen positive signs of recovering growth, in particular in the UK and the Netherlands, but also in the mortgage lending market in Sweden. Overall, however, volume development only contributed with 40 million to the NII in the quarter.

The main effect in the NII rather related to effects from policy rate cuts with lower short-term rates, which impacted the net interest margins. In Q4, we received the final bill for the deposit guarantee fee in 2025 from the Swedish National Debt Office.

It was a touch higher than expected and resulted in a top-up in Q4, burdening the NII with around 50 million. Currency effects were negative due to the strengthening of the Swedish krona.

Net fee and commission income increased by 5% in the quarter. The bulk of fees and commission relates to the savings business, especially the mutual funds offering.

That's an area where the bank has seen the bulk of the increase in fees and commissions due to both positive market development as well as continued strong net inflows into our funds under management. In both Sweden and Norway, the bank's market share of inflows into mutual funds exceeded the market share by the outstanding volumes by more than two times in 2025.

This has consistently been the case for over a decade in Sweden. In Norway, it has been the case since the bank refocused two years ago to a more balanced growth between lending and savings.

Other fees have grown a bit more moderately. Now over to the expenses.

As shown in the slide, the trend of increased cost has has broken in 2024, and the expenses have since since then traded trended down, despite annual salary revisions and general cost inflation. Central and business support functions have been streamlined, and the use of external consultants materially reduced.

The positive trend has continued also in Q4 in 2025, and we can note that the underlying staff costs are down by 5% compared to the same quarter last year. Looking at the other expenses, they were down 4%, were 4% lower compared to the same quarter in 2024, and the bank is now in a very good position in regards to cost efficiency.

That does not stop us from continuing to strive every day to increase our productivity. As part of that daily endeavor, we always explore and embrace new opportunities arising from technological advancements.

One obvious field today is the AI, where we spend a lot of time and resources in examining the potential for improved operational excellence and productivity, as well as for further improvements of the customers' experience and the bank's value proposition. Now over to asset quality and the credit loss reversals.

When summing up the last 5 years, meaning since before the pandemic, the bank has in total booked net reversals, and as said now, the eight quarters in a row with reversals. The absence of credit losses is an evidence of the prudency in the bank where in the bank when it comes to managing credit risk.

It reflects the bank's underwriting procedures and policies, the risk appetite, and the customer selection, as well as the preference for collateralized lending, but also not least in the ability to detect early signs of credit risk deterioration and the ability to quick make the necessary actions and decisions. In this context, the local presence through our branches and the close relationships with our customer customers is essential, but cannot be emphasized enough.

Now turning to slide 9, a few words about our respective home markets. To start with our largest home market, Sweden, which accounts for 71% of group earnings, the market position for the bank is strong, with the bank being the largest combined lender in private and corporate lending.

Mortgage mortgage volumes are now growing again and have been since the last spring, although with a bit moderate pace. The market share of the net new mortgages was 6% in the first half of 2025, but doubled to 12% in the second half.

Corporate lending corporate lending volumes remains a bit on a standstill, but expectations for recovery along with general economic growth in Sweden going forward. The saving business, as I've touched upon earlier, continued to develop well.

The cost-income ratio was 33% in Q4 and the profitability around 15%. The UK accounts for 14% of the group earnings.

Household lending volumes has consistently grown since early 2025 and were up another percent in Q4. Corporate lending has grown consistently since the since the summer of 2024.

In Q4, the volumes were up by 2%. We also see deposit volumes increasing steadily on both the household and the corporate side.

In the recent quarters, the efficiency has gradually improved, and we are now starting to see initiatives filtering through in the cost base that offset margin pressure on the NII relating to lower short-term rates. The cost-income ratio improved in the quarter to 57.5% from 59% in in Q3.

The operating profit increased by 3% in local currency, and the profitability was 13%. Norway accounts for around 9% of the group earnings.

After a refocus period that started during the spring in 2024, the business is now gradually becoming more balanced between lending, deposits, and savings. While the competition, especially the mortgage market, is fierce, the bank continues to focus on deepening our of our customer relationships, and also in the fields of deposit and savings.

As mentioned, the savings business is progressing very well in Norway. In 2025, the bank attracted 6% of the net inflows into mutual funds in Norway compared to the market share of just of just about 2% on the outstanding volumes.

For the full year, the cost-income ratio improved to 43% from 46% in 2024, and the profitability improved from to 11% from 10%. Finally, the Netherlands account for 2% of the group earnings.

Just like in the UK, the trend shifted one, one and a half years ago on the household and corporate lending side. We have now seen a steadily growth month-by-month.

The positive volume development was, however, offset by the margins due to lower short-term euro rates. The RoE fell slightly in the quarter.

The bank is in a very solid financial position. Credit risks, funding risks, liquidity risks, and market-related risks are prudently managed, and the capital position is strong.

After the proposed dividend of 17.5 krona per share, the CET ratio stood at 17.6% or 285 basis points above the regulatory requirement, and therefore now within the long-term range of 100 to 300 basis points. The dividend proposal corresponds to 146% of the earnings generated during the year.

The bank should always be considered as one of the most trustworthy and stable counterparts in the industry. This is also the view in the lending rating agencies, who rates the bank the highest among comparable banks globally.

Finally, to wrap up, we see now positive household lending growth in most of our home markets and within corporate lending growth also in the UK now again and in the Netherlands. The commission business is growing, and we see momentum continuing to build in the savings market savings business with strong inflows of asset under management into the bank.

Income was up in Q4, and the cost discipline is maintained. Asset quality is robust, and the financial position is very strong.

The customer satisfaction levels during the year followed the long trend of being higher than average of our peers in all of our home markets and on both the household and on the corporate side. We will continue our endless efforts of making sure that our advisors in our branches are close and easily available to our customers, simply providing and offering the customer the customer asks for and appreciate, local and personal as well as through our digital digital offer and our 24/7 service over the phone.

Finally, I'm also pleased to note that the total shareholder return created created during 2025, meaning the share price performance plus paid-out dividends, exceeded 30% in 2025. With those final remarks, we now take a short break before moving into the Q&A session.

Thank you.

Hello, everyone, and welcome back to this Q&A session. This is Peter Grabe, Head of Investor Relations speaking, and with me I have Michael Green, CEO, and Mårten Bjurman, CFO.

As always, we would like to remind you that we appreciate if you ask one question at a time in order to make sure that everyone gets a chance to ask a question. With those words, operator, could we please have the first question?

Thank you.

Thank you, and good morning, guys. One question then.

Can we talk about volumes? I'm looking at, you're growing nicely in the UK and Holland, as you say, but in Sweden, there's been no growth in the fourth quarter or year-on-year on lending or deposits, while we know there's growth in the market.

Could you tell us what's driving that and how are you going to turn that around? Same question for Norway, where lending actually fell quite a bit in the quarter, and so did deposits.

How are you going to turn that around?

Thanks. Good morning, Andreas.

This is Mårten speaking. On Sweden first, I think it's fair to say that we are the largest lender totally in Sweden, and by that, it's fair to say that we struggle a little bit to grow more than GDP over time.

As we have now a little bit of a steady market or slow market in the corporate lending side, I think we suffer from that a little bit. Also, I think you should bear in mind on the corporate lending side that you're looking at the net number, and that is not very impressive.

Still, there are things going on underneath that. We are leaving connections that we do not see fit in our book for various reasons, and we are bringing on things as well.

Things are going on. We strive for activity, of course, and we hope that the market picks up a little bit.

We believe so. We've been waiting for it quite a bit, so that's on the corporate side in terms of lending in Sweden.

On household lending in Sweden, I think it's fair to say also that what Michael was saying earlier on that we have seen a pickup in our volumes in the second half of the last year, and I'm pleased to see that. Increased activity, and we have high hopes for that continuing into this year, '26.

In Norway, I think it's fair to say that it's been a tough quarter in Norway. I agree with you, Andreas, on that point.

We have seen consolidation in the market. We have seen compressed margins, also as a result of cuts in policy rates, and above all, I think we have seen fierce competition.

It's tough for us in the quarter. Bear in mind, we are long term.

A quarter is a very short period of time. We have a deep trust in our way of banking.

Each and every branch manager out there is fit to navigate through this, and I'm very confident that they will do so in the future. We have to be patient a little bit.

If you look at the year, the total year in Norway, it's not good, but it's decent, I would say, in terms of volumes.

Yes, good morning. Just one question on capital, if you could tell us what made you change your mind now to move within the management buffer range as the previous couple of years, you've chosen to be above your management buffer range because of an uncertain environment.

Now you seem to think that the environment is less uncertain. Just trying to get some predictability into it.

Should we now expect you to remain within the buffer for the foreseeable future, and what could trigger you to revise that stance? Thank you.

Thank you for that question, Magnus, and good morning. No, and yes, the short answer is yes.

I think you should expect us to strive to be within the interval as from now on. Let's come back to that a little later.

I think you should also bear in mind where we're coming from. We're coming from years back, we had a huge surplus of capital for various reasons.

That's the starting point, and then we have gone from there, taken it down step-by-step. I think we've been fairly clear on our intention moving into that interval.

I think we touched upon it quite a bit during Q3 closing that our intention is to move into the interval. Shouldn't come as a complete surprise in my world at least.

I'm very pleased to see us taking that step. It has not so much to do with us changing views.

We still think that our credit book is of superior quality, of course, and we don't see anything else that is worrying from that sense. It's just a matter of prudency, taking it step-by-step into the interval, I would say.

Okay. Just on capital, on slide 19, when we look at your risk-weighted asset progression, it's down 3% quarter-on-quarter.

Is there anything in there that you would say anything that could impact that level in 2026 we should be aware of? I saw that you moved your op risk change to Q4 from Q1, but is there anything else or is this a reasonable starting level?

No, I don't think that there is anything to highlight in that picture. It's nothing to be worried about looking forward, no.

Oh,

okay. Thank you.

Thanks.

Good morning. Following up on the question on capital.

Now that you are within the target range for the first time since before the pandemic, could you maybe help us understand how we should think about the long-term average buffer within this range, because it's a pretty big range. Should we think that you want to be in mid-range over time, or rather at the top end of the interval?

I don't want to guide where we want to end up in certain situations.

I think you should bear in mind that this interval was set so that it can fluctuate a little bit. That's the whole purpose of it.

Is it a reasonable size interval? You can debate that, of course, but it was set a bit back in the years.

When it comes to the outlooks, I think as it regards anticipated dividend and all that, we will come back to that in Q1 closing. I don't want to guide anything further.

I'm extremely pleased that we are now in the interval again.

Thank you.

Thanks. One

Hi, and thank you very much for taking my question. Just one from me, please.

You talked about the momentum in the UK, where I see average lending and average deposits plus 1% sort of on an annualized basis. Is this sort of volume growth something you're happy with or sort of how should we look at this?

Is it more momentum that you're carrying in terms of sort of pipeline into next year, or is it the realized performance? Thanks.

Thanks for that question. I'm happy to print those figures for UK.

I feel that this momentum in the business is now stable. It is a broad and healthy growth that we see, is not something odd in it.

It's across our branches that we are growing now, and I feel confident that that will continue. I had the pleasure to go over there a couple of weeks ago, and it's evident that the branches in UK, they are in a different space now compared to a bit back.

It feels good. Are we happy with the speed in terms of lending growth in UK?

I think we always want more, of course, but I'm happy to conclude that this has reached a turning point in that sense. Hello, it's Michael here.

I'll just chip in here. I think the overall in the bank right now, the ambition level and the goals in each country and also in every branch for between 2026 is quite higher than has been before.

The willingness and the ability to work with more customers, especially in the UK and the Netherlands, and also in the Norway to some extent, are on a much higher level when it comes to ambition. We will be very close following up how this will work out in our different home markets.

Okay. Thank you very much.

Hi. This is Sofie from Goldman Sachs.

Thanks a lot for taking my question. Just going back to the kind of the growth in Sweden, could you maybe just comment a little bit how you see competition for mortgages, what the outlook is, how much kind of growth you would expect in mortgage lending?

Also related to this, do you see any risk for kind of the risk weights for housing associations, which I believe is 3.7% currently, that could be increased to kind of low teens or at least double-digit levels? Thank you.

No, okay. Again, I think bear in mind the size that we have in the mortgage market in Sweden.

It's difficult to grow extensively so in terms of outlooks, it's hard to tell. Again, I'm happy to see the momentum that we have later in the quarter, and hopefully that will continue.

I think as it regards your second question, the housing association and the risk weights, we don't have any view in that for the moment, no.

Thank you.

Morning, and thank you for taking my question. Can we just go back to the corporate lending market in Sweden, and can you just talk a little bit more of how you see competition there and how do you see pricing as well?

Could you maybe just also touch on the property management lending, where it looks like the loan book on a net basis didn't really grow in Sweden in 2025? Thank you.

In general, when it comes to the lending book in Sweden and the market there, we always follow our customers when they grow. We are there and do our fair share of the business.

The activity from our corporate partners or clients has been a bit muted even this year. I think many of us were a bit more optimistic when we entered the year, but then you had the Liberation Day and the tariffs and all that, and that actually made the customers a bit reluctant to invest, and also the consumers.

It all starts with consumers, and they've also been a bit hesitant to really invest or increase their spending in the year. I'm very hopeful, actually, if we listen to our experts in macroeconomics in the bank, they're very positive to the growth in Sweden.

Now, we need of course to bear in mind that things can change, as we saw last year. The general view now is that we will have quite high growth in GDP in Sweden, which we will benefit from because we'll follow our customers when they grow.

I think there is a bit more interest in investing from our corporate clients in the late of the year. You should also, as Mårten previously said today, of course we report always net figures.

There's change in the portfolio, there are volumes that we actually more or less has welcomed us to come out of our books, and there are much more strong corporate business that has come onto our books in the last year. The risk level and the performance in the lending book is better than it was when we started the year.

Thanks very much.

Good morning. I saw the margins are taking the NII down this quarter again quite a lot, and you have probably upcoming rate cuts in the UK and in Norway.

Do you expect NII to trough in Q1 or during the first half year, or do you have any expectations on when we should see growth?

I don't want to guide and be that specific on the Q1 number, of course. Yes, you're right.

We are expecting rate cuts in those countries. The margins in UK, they are pretty healthy as it is.

If we end up in a policy rate where we think, then we can do healthy business there. Reminder also, I think the volume growth in UK can compensate quite a bit as it regards the fall in margins.

Norway, yes, we are struggling a little bit this quarter. We'll see what happens.

We don't guide into Q1, but obviously, we see a lot of activities in our branches and hope for the best.

Thank you.

Thank you.

Sorry, yes. Hi.

Sorry. Yep, thank you.

Just on the growth you're talking about, should we read this as the cost management side that you went through over the past couple of years that you're changing here and looking at investing a bit more into your business and perhaps staff levels? If I could just also ask, the VAT refund that you took in the quarter, is that all the one-off you're looking to get, or do you have other applications in the pipeline?

Thank you.

Thank you for those two questions. On costs first, I think yes, I'm personally a little bit surprised of the outcome here.

It's extremely impressive if you ask me that we continue to perform well on the cost side. For the future, yes, I expect that we gradually pick up a little bit in costs and have investments near the customer, near the business, and we are happy to do so.

First, we need to see the business growing and the need for us to spend more money. Again, you should remember who we are.

We're Handelsbanken and we keep the money tight to our body. It's about being stringent from that perspective.

The VAT recoveries, yes, you saw us print 200 million. It's booked on the line other income.

Some of that, a portion of that, I think the number is 142 million, is related to the parent company for the year of 2019, 1-9. Yes, potentially, we have a little bit more coming from that then in terms of reimbursements for the year after that.

Obviously, it's a little bit too early to go into details in that, but yes, potentially is there.

Great. Thank you very much.

Thank you.

Thanks for taking my question. Just a quick one again on the management buffer.

What should happen to bring this to the midpoint of the range, to 200 basis points? You bumped it to 400 on uncertainty.

The situation doesn't look different, at least to me, at the moment, even probably worse, but you bring it down to 300 now. I was wondering what could drive it to 200, and is this your decision, or a decision that you have to take together with the Swedish FSA, because by magic, all the Swedish banks now got to 300 exactly at the same time.

I was wondering whether this is a management decision or someone else's decision. This is my first one.

The second one, if you could shed a little bit more color on the decline of RWAs in the quarter, what is driving that? Thank you.

Can I just take the last part of the first question? I say it's absolutely a discretionary decision within the bank's board and has nothing to do with any authorities or something else if I understood your question correctly.

I emphasize we're not on the 300 range, we 285. We just do what we've said.

We've said we're going to go and move into the interval. We've said it for many quarters now, and we will always assess every quarter or every year actually where we would like the bank to be.

That's something we work with. Now we're in the range and that could vary within the range, and it's up to our decision to make sure that we're always run the bank prudently, but also has the capacity to be one of the largest lending providers in our home markets, and this is the assessment we do right now.

On the second question there, the movement in REA, I think you can see the details in the slide pack there. There are different components, obviously: volumes, migrations, and risk weight floors, and currency effects and other, but those are explained in the pack.

I will look at it.

Thank you. Mm.

Hi again. No, just coming back to costs, since you're taking them down or at least being quite much below what people expected in Q4.

What's your feeling about how staff are taking this? Do you feel that they're happy or are you afraid of that you should lose important people as the compensation is not up to standards?

Hi. No, on the contrary, actually.

The thing when you manage a downturn in a number of employees, if you have the right kind of leadership and the story with that, and you see that the effects on the bank are there, you actually create the opposite. You create a very strong sense of and a feeling for the bank.

You really want to be part of something that is actually evolving in the right way. Also it also puts the finger on performance, we always need to have people working very intensively, very hard on the business.

What happened, the most of the downturn in staffing was not close to customers. It was on the head office and central departments.

What happens there is that the branches, they feel that everybody who's supporting the business is being more productive, more cost efficient, that really empowers them to do more business. The mindset within everybody who's still there, and the most of us are, we are much more business-oriented this year than we were a few years ago from the central department.

We really make sure that we're there for our employees dealing with customers, and they really feel that. I think absolutely having less people as we have now creates a lot of good energy.

When you look at the employee survey we do every fall, it has never been on a higher level as this year. We have a very, very strong, committed workforce, if I put it that way, both on the branches, but specially in our days, also in central head office.

I'm very happy with the mindset of how you work and what we do here in the bank for whom.

Very good.

Thanks.

Hi. Thanks again for taking my second question.

Just to follow up on Octogonen, we saw that there was a small reversal this quarter of 39 million Swedish krona. How should we think about the Octogonen going forward?

Is it fair to assume that that will be kind of zero going forward or is that important any longer for your staff? If you could just kind of help us how we should think about Octogonen contribution going forward.

Thank you.

I think Octogonen still plays a role, obviously, in our corporate culture. I think it's expected for that to last a bit.

When it comes to the actual number going forward, I think we just have to wait and see. It's always a little bit of a guessing game where we come out.

Now we have had a little bit of a reversal in Q4, but I don't want to predict the future from that sense. Is the Octogonen here to stay?

Yes. I think it's fair to say that it still plays a big role for our employees.

What drove then the reversal in the quarter? What was the rationale for reversing it?

It's a huge calculation behind that, and obviously, it's related to our corporate target to have a stronger RoE than our peers in our way of looking at it, and that's mainly driven by where do we want to compare us versus the peers in terms of geographies and different things. There's a quite a bit of calculation going on there, and in this case, we had to revert a little bit the number in Q4 again.

We also wait for the British bank to post their Q4s in order to make the correct calculations. This is the best assessment with the information we have right now from our competitors that has posted their Q4s.

Thank you.

Please go ahead. Hi, and thanks for taking my follow-up.

I just wondered what's happening to the IRB model review in the UK, and also what's happening to the Swedish IRB model review. I think that's a 50 bps requirement in your CET1 requirement,

just wondering what the update is there. Thank you.

I understand the question, but the complexity and the processes that goes into that work is really evident, and it's far too many details to go into that in this call, I'm afraid. The outcome, we don't really know.

We are working on the situation that we have in the IRB world, both in UK and for that matter in other places as well. It's too early to tell to be concrete in that matter.

Thank you.

Thanks for taking a quick follow-up. Just wanted to ask right at the beginning of the call when you were asked about loan growth in Sweden, if I understand and remember correctly, you stated something like that you see in the market something that does not, how can I say, kind of comply with your risk profile.

If I understood it correctly, could you shed a little bit more color what you were referring to, if I got it right?

No, let me clarify that, and sorry for being a little bit vague if that was the case. What I was saying, and I think that you're alluding to here, is that we are a large lender in Sweden.

To be able to grow significantly more than GDP, that would mean that we would have to alter our risk appetite, and we obviously do not want to do that. In the long term, I think it's fair to say that you should expect us to grow with GDP, more or less.

I think that was the core message.

Now it's clear. Thank you very much.

Thank you.

All right, thank you, everyone, for listening in and for all the questions, and we wish you all a good day. Thank you.

Thanks, bye-bye.