Good morning, thank you all for dialing in this morning. I'm Maria Caneman, Head of Investor Relations at Swedbank, and I'm happy to welcome you to our third quarter results presentation.

I have our CEO, Jens Henriksson, and our CFO, Jon Lidefelt, with me. Jens and Jon will start with the presentation, and then we will move on to Q&A.

With that, over to you.

Thank you, Maria. The third quarter was characterized by high business activity.

Through advisory, financing, and everyday banking services, we support our customers. In uncertain times, Swedbank has once again delivered a strong result.

The global economy continues to show resilience. Last week, I attended the IMF's annual meeting in Bangkok.

Global growth is being pulled in two opposite directions. Geopolitics are holding back, while large AI investments contribute on the positive end.

Global growth is expected to reach 3% this year and to increase somewhat in 2027. Swedbank's four home markets have strong fundamentals, and the economies continue to perform well.

Rising real wages, strengthened purchasing power, and increased investments are the drivers. Our economists estimate that the GDP of Sweden, Estonia, Latvia, and Lithuania will grow by 2% to 3% this year, and that is twice the expected growth rate in the euro area.

Swedbank has once again delivered a strong result. Profit for the quarter increased and amounted to 8.2 billion Swedish kronor, return on equity to 15.6%.

Both net interest income and net commission income increased, while net gains and losses and other income decreased. Costs were seasonally lower.

Credit quality is solid. The risk level in Entercard has been taken down, and in combination with an improved macroeconomic outlook, we had 700 million in net reversals of credit impairments during the quarter.

Earnings per share amounted to 7 kronor and 30 öre. Our work with the IRB overhaul continues, and after the end of the quarter, we received approvals on both our mortgage model in Sweden and the corporate model in the Baltics.

We continue to deliver on our plan, Swedbank 15/27, and as you all know by now, it focuses on three areas. We will strengthen our customer interactions, grow our volumes, and continue to increase our efficiency.

With our new organization in place, we work proactively and closer to our customers. We have a clear business momentum across our four home markets, and this is reflected in the strong development within mortgages, within savings, and within the corporate business.

Swedbank is the market leader in mortgages in Sweden, Estonia, Latvia, and Lithuania. In Sweden, we grew faster than the market.

During July and August, we captured 19% of total market growth through our own channels. In the Baltics, stable labor markets and rising real wages contributed to continued high activity in the housing market, and our volumes increased by 6% in local currency.

The customer activity was also high within the bank's savings business. Swedbank Robur is the largest fund provider in Sweden, Estonia, Latvia, and Lithuania, and net inflows to Swedbank Robur and Swedbank Försäkring amounted to 8 and 12 billion kronor, respectively, and this reflects our customers' trust in our offering.

During the quarter, we launched the fund Swedbank Robur Food and Water that invests in companies developing solutions for the future supply of essential resources. Swedbank was once again perceived as the most sustainable bank in Sweden.

Our clear customer focus and proactive work have also shown results in the corporate business. Corporate lending volumes increased by 12 billion Swedish kronor during the quarter, of which the real estate sector accounted for approximately half.

In the Baltics, corporate lending increased by 6%, and the growth was primarily driven by both the agricultural and the energy sector, and we are proud of our role in the energy transition in Estonia, Latvia, and Lithuania. In the Baltics, Swedbank was for the eighth consecutive year named the most loved brand, and we continuously developed the bank and our offering.

Our work with AI is an important part of executing our strategy. We use AI to develop our business, strengthen our employees, increase efficiency, and to strengthen cybersecurity.

During the quarter, we launched the Oak, our AI assistant for everyone in the bank. Our approach is clear: AI for all, opportunities for all.

Let me also take the chance to say a few words about our societal engagement. As a bank, we have an important responsibility to help improve financial health for both adults and children.

Our magazine Lyckoslanten has now been joined by the Gimi app. Through this new partnership, we help children explore everyday finances and savings together with their parents.

Let me now hand over to our CFO, Jon Lidefelt.

Thank you, Jens. We deliver a strong result supported by high customer activity across all business areas.

Return on equity was 15.6% and the cost/income ratio 0.41. Excluding the 673 million of extraordinary costs this quarter, return on equity was 16% and the cost/income ratio 0.37.

We continued to deliver on the restructuring program that was presented in the first quarter. As already announced, we have sold the non-performing consumer loan portfolio in Entercard.

We expect this to be closed during the fourth quarter. We have also, after the quarter ended, sold the performing consumer loan portfolio.

This is expected to be closed during the first quarter. High customer focus and continued demand across our core markets led to increasing lending volumes.

In Sweden, mortgage volumes in our own channels increased by 7 billion, while savings banks' volumes on our balance sheet added another 1 billion. Corporate lending in the Swedish business areas grew by 3 billion.

In Baltic Banking, growth momentum is strong, with mortgage volumes increasing by 6 billion and corporate lending by 5 billion. Overall, our loan growth is well diversified across geographies and sectors.

Deposit volumes developed in line with normal seasonality. In Sweden, private deposits decreased as normal during the summer months.

Corporate deposits were stable as the decrease this quarter was mainly driven by institutional flows. In Baltic Banking, private deposits increased by 2 billion across all three countries.

The Lithuanian pension reform continues to drive private deposit growth, although the pace is decreasing. Corporate deposits increased, mainly driven by Latvia and Estonia.

Net interest income increased by 3% compared with the previous quarter, supported by higher business volumes and ECB rates. FX and day count effects contributed with 156 million.

Funding costs increased during the quarter, driven by increased volumes and higher market rates. Overall, our interest rate sensitivity is as expected, with effects on funding materializing ahead of asset repricing.

Net commission income increased by 5% compared with the previous quarter, supported by strong customer activity across several product areas. Strong stock market performance, positive FX effects, and net inflows of 8 billion contributed to growth in assets under management, which reached 2,989 billion in total.

Payment-related income was strong, supported by seasonally higher card activity. The Swedish insurance business developed well with high net inflows.

Net gains and losses reflected high customer activity and solid performance in FX and fixed income. The Treasury result was impacted by negative revaluations, which was largely offset by positive share price performance in strategic holdings.

Other income was lower compared with the previous quarter, primarily driven by the insurance result in Baltic Banking. This stemming from higher claims due to floodings, as well as negative revaluations driven by the higher interest rates.

The results from partly owned companies also contributed. Costs developed as expected, seasonally lower and in line with previous communication.

We incurred 190 million in the third quarter of the announced 1.3 billion in extraordinary costs for 2026. The settlement with DFS, corresponding to 483 million, was also booked as an extraordinary cost during the quarter.

Hence, extraordinary costs amounted to 673 million this quarter. Adjusting for these, underlying costs followed the normal seasonal pattern and were almost 4% lower.

Our cost guidance of 27.5 billion for 2026 remain unchanged. It is, as excluding extraordinary costs and FX effects.

The full-year FX effect is estimated to add approximately 250 million, given current levels. A reminder here that though a weaker Swedish krona is negative for costs, it is positive for the bottom line.

As communicated earlier, investment levels will remain elevated in 2027 related to the restructuring program, but as synergies will start to materialize, they will offset the additional investments during 2027. By the end of 2028, the program is expected to be fully implemented and deliver a lower annual cost base of approximately 1 billion.

Asset quality is solid, with continued low realized credit losses. Total credit impairments amounted to 701 million in reversals.

Updated macroeconomic assumptions decreased impairments by 216 million, rating and stage migration added 420 million, primarily driven by a few corporate customers. As a consequence of the revised macroeconomic scenario, the post-model adjustment was reduced by 70 million and amounted to 93 million at quarter-end.

Individual assessed provisions decreased, primarily related to a few corporate customers recovering and hence moving from Stage 3 to Stage 2. Entercard had net reversals of 421 million.

The main impact is the 543 million in revaluation stemming from the sale of the non-performing loan portfolio. Overall, our loan portfolio is solid and resilient.

This supported by prudent underwriting standards, strong collateralization, and broad diversification across sectors and geographies. Our CET1 ratio at quarter-end was 17.2%, corresponding to a management buffer of 215 basis points above regulatory requirements.

This is driven by profit, volumes, and FX. The main impact this quarter is, however, the annual SREP decision from the Swedish FSA.

The Pillar 2 requirements increased by 23 basis points. The main driver here is technical and relates to how the SFSA calculates the IRB add-on we hold until the updated Swedish IRB mortgage model is implemented.

Further, also from an increase in interest rate risk in the banking book. Hence, our CET1 capital ratio requirement has increased from 14.8% to 15.1%.

As Jens said, we have now received clarity on several factors impacting our future capital buffer. This is mainly due to significant steps forward with the IRB model approvals in Sweden and the Baltics.

I would like to take the opportunity and dive a bit deeper into this development over the coming two quarters. Note that I will do this pro forma based on the 3Q Q3 balance sheet, hence growth and other factors will, of course, also have an impact.

As we have since before approval on our large corporate IRB model in Sweden. We have now also received approval for the Swedish mortgage model, which is expected to be implemented in the fourth quarter.

This will then reduce the IRB-related Pillar 2 add-on, leading to an increased buffer of around 70 basis points. At year-end, the Swedish FSA will move the remaining IRB-related add-on from Pillar 2 to Pillar 1.

Capital requirements in nominal terms will remain unchanged, but it will result in a small negative effect on the buffer by approximately 6 basis points. Then we have received approval to move sovereign exposures to the standardized approach, leading to a positive effect on the buffer of around 10 to 12 basis points.

The sale of Entercard's non-performing loan portfolio is expected to be closed during the fourth quarter and generate a CET1 benefit of approximately 3 to 5 basis points. Summing up the fourth quarter, these effects are expected to have a net positive impact on the buffer of around 75 basis points.

Then going into the first quarter next year, the sale of the performing loan portfolio in Entercard is expected to be closed during the first quarter and give approximately 8 to 10 basis points of CET1 buffer benefit. We have also received approval for our Baltic corporate model, and it will be implemented in the first quarter.

Connected to the approval, we are required to do amendments to this model. Until these are implemented, we will hold an Article 3 add-on, reducing the buffer by approximately 25 basis points.

This is in line with the approximately 20 billion potential REA effect that I have talked about already in the first quarter this year. Summarizing both quarters, we expect a CET1 buffer benefit of approximately 60 basis points over the coming two quarters.

Long term, after these two quarters, we expect the finalization of the IRB process to result in a net positive capital effect. With that, back to you, Jens.

Let me now briefly summarize the quarter. Swedbank has once again delivered a strong result in uncertain times, and today, we can report a return on equity of 15.6% during the quarter.

Swedbank is the market leader within mortgages in Sweden, Estonia, Latvia, and Lithuania. The savings business is characterized by high activity and strong net inflows.

The corporate business grew broadly and lending volumes increased. We have a clear business momentum.

We continue to deliver on our plan, Swedbank 15/27, and Swedbank operates in Europe's most attractive markets. We stand strong, and we are well positioned for sustainable growth and profitability.

Our customers' future is our focus. With that, back to you, Maria.

Thank you. We are now ready to begin the Q&A session, and I'd like to start with a kind reminder to please limit yourselves to two questions per turn.

Operator, please go ahead.

Good morning. Pro forma, your CET1 buffer is set to rise, which you mention, Jon, and you will be roughly 75 basis points above the 200-bp normalized level in the Swedbank 15/27 plan.

You still have one model outstanding, I think, the Baltic retail one. Do you want to hold a buffer above the 200 basis points until that one is approved?

If not, should we expect you to begin distributing the excess capital already this year, or how should we think about your buffer going forward?

Let me answer that question. The first thing is that we have more than one model.

There's a lot of models operating. Today, we could talk about two important models, but there are, of course, many models out there, it's not just one single.

When you look on capital, we have a capital buffer range between 100 and 300 basis points, and as you said, in our 15/27 plan, we target the middle of it, i.e., the 200 basis points. We have no intention of holding more capital than necessary, and we have a dividend policy of 60% to 70%, and capital release above continues to be a judgment call, and in conjunction with the Q4 and the full-year report, the board will present the dividend proposal to the AGM.

That's very clear. Thank you.

Then my second question is on Lithuania. I think credit impairments in that country was 53 basis points in Q3.

Is that a few corporate names, or is it the energy and agricultural lending that you mentioned which drove the corporate growth that has resulted in the elevated credit impairment level, and should we expect anything more from Lithuania?

Thank you, Jacob. You're right.

There are a few individual corporates in Lithuania, but also in others that is standing for the development that you saw in the credit impairments bridge. What I think is important is that generally, we have very solid credit portfolio, and we have a prudent underwriting standards, but of course, there are always movements in individual corporates.

In this bridge that I showed you, you need to look on rating and stage migration together with the individually assessed because there are movements between these as I tried to point out in the speech. There are some corporates moving in some direction and some in some other direction, which I think is normal for a corporate portfolio.

Perfect. Thank you.

Thank you and good morning. First I wanted to ask some clarifying questions on the bridge, Jon, that you provide on page 18 of the presentation.

The 1 percentage point drop in capital requirements to Q4, 0.7% of that relates to the implementation of the new Swedish mortgage probability of default models, right? What is the remaining 0.3%?

The report mentions that 0.3% of the total 1% P2R add-on remains as a capital add-on in Pillar 2, I think it says, but really that shifts to Pillar 1, right, due to this also mentioned methodology change by the SFSA that you mention in the report elsewhere. That means the whole 1% P2R SFSA add-on for mortgage IRBs disappears, right, but a minority remains as a risk-weighted assets.

Is that correct?

Hi, Martin. That's perfectly correct.

If you look at the bridge, then you have the Swedish mortgage first, and then you have P2R to P1. Both of those are add-ons that we hold until we get approval for the IRB models in Sweden.

They are roughly today 1 percentage point in P2R. So 70% of it roughly disappears since we now have gotten the approval of the Swedish mortgage model, and the reminder then roughly 30 bps will be moved to Pillar 1 instead.

All in all, this leads to 1 percentage point lower capital requirement, but the remaining models that will then be moved to P2R will require a bit higher REA, which will have a negative impact on the ratio. Yes, you're correct, and I hope that gave some more clarity to it.

Great. Thank you.

Then secondly, looking at your provisions line, even excluding the release from the Entercard NPL sale, which you had flagged beforehand, right, credit impairments were reversals net on net basis of 158 million. I think individual assessment drove a lot of this remaining reversal, but is there a common theme behind these individual assessment reversals in Q3, and is that representative of the current underlying performance of the portfolio?

I think if we exclude the Entercard, I think you should look at this that the macro forecast both from our economists, which is the input to our credit impairments modeling, but also if you look from other macroeconomists around the world, the main scenario is a positive development, increased growth for our home markets. This means that we always tend to be rather prudent when it comes to credit impairments, means that we're coming with a little bit provisioning for a little bit sort of worse macroeconomic environment than what the forecast is now going into.

That has a release then on the macro scenarios, but it also goes into the post-model adjustment, where we sort of previously taken provisions for potential worse outcomes that are now not materialized. That is one factor.

Then the other three: rating and stage migrations, individual assessment, and other, that is movements between different companies and sometimes the same and sometimes new. We always have these movements on individual corporates in a big portfolio.

These are the main comments I would say on that.

That's it for me. Thank you.

Thank you and good morning, everyone. If we start with NII, you didn't miss consensus by that much, but we were a bit more optimistic, and when I look at Sweden and the Baltics, you performed as expected, but Treasury was quite much worse.

I tried to understand that the size of the funding, that's one question, why you continue to do so much wholesale funding when you're still growing your deposit base and you have ample deposits around. Also, we think that we got the timing effects right on your covered bonds, but did you see timing effects on your CPs, for example, or could you explain a bit what drove the Treasury NII?

That's my first question.

If you look at the Treasury NII, there is volatility in this over time. It is revaluations, and that over time, these revaluations will end up in NII, but they can go up and down.

I don't think there's anything particular in that sense this quarter. It's just normal volatility.

When you look at the NII apart from that, let me say a couple of things. One, on the Baltic, we've had increasing Euribor and we've also had increased ECB rates, and our Baltic NII is up 11% this quarter, I think it was 10% the previous quarter.

That follows exactly the sensitivity that we're having. It's 6 months Euribor, it takes 6 months from the changes to roll in.

The increased ECB and Euribor has also, of course, a negative impact on our funding, since parts of our funding is in euro. If you look on the Swedish side, no rates has really moved during this quarter.

What we saw if you go back before the summer was though that Stibor started to go up. This has an impact on our funding costs that we have taken with us last quarter and this quarter.

Central bank has not hiked the rates, and we have not been sort of hiking customer rates that much. In that sense, you don't have the interest rate positive effect on the Swedish NII, you have a bit higher funding costs on the Swedish NII.

In some sense, timing effect, yes, since Stibor went up well ahead of potential changes from the central bank. Then

just on the revaluation effects you mentioned in Treasury, it's impossible to know beforehand roughly what size would that have been?

We're talking about hundreds of millions normally plus or minus in quarters for Treasury. I don't remember from the top of my head what it was this quarter, but it's quite substantial that has been sometimes positive and sometimes less positive as this quarter.

Over time, this goes out to NII.

Yeah. No, that's fine.

Then since you mentioned the rate movements, if I look on page 21 where you have your NII sensitivity, of course, you show that you have or assume roughly zero beta on transaction accounts and equity, of course, but then you leave term deposits outside your calculation. Our guestimate would be that beta is maybe not zero, but at least not 100, and maybe 50 or even maybe 20.

Isn't actually your rate sensitivity quite much higher than what you actually see if we take something less than 100 for term deposits both in Sweden and the Baltics?

This is a theoretical calculation since we're adjusting rates up or down on everything simultaneously, or everything that can be changed. It's a way to give you some easier way to do the calculations, because then, of course, it's estimations on margins and how much we change rates on different things.

You're right. The beta, I think, in the Baltics for remunerated accounts was 50% this quarter, if I recall correctly, in the Baltics.

Perfect. Then very quickly, just to clarify, on the bridge on page 18, when you say that you're going to have 290 bps in Q4 and 275 bps in Q1, that's excluding any capital build that you should see from normal business?

Yes, this is based on Q3, and then we just add these factors, there are, of course, other factors that will have an impact in the end. This is just trying to give you clarity on what we know today.

That's perfect. Perfect.

Thank you.

Hi, good morning. Thank you for taking my questions.

On the deposit margin and competition, because if we look at the deposit balances, it declined 1.5% in Sweden during the quarter, driven by both retail and corporate. How would you characterize the competitive environment for deposits across Sweden and the Baltics?

Are you seeing any meaningful changes in the customer behavior or price sensitivity, and where is competitive pressure most pronounced? How are you balancing deposit retention and volume growth against protecting margins?

Thank you for that question. The first thing is to say is that it is a highly competitive market, but we have not seen any changes in that market during the quarter, but you also have to remember there is seasonality in this as well, and also sort of different actions by corporates in this.

You want to add anything, Jon?

No, I think the main right now is seasonality, and then you have fluctuations in institutional flows, which is normal.

Thank you. On the competitive environment, given some of your Nordic peers are taking sizable regulatory capital headwinds while the impact for Swedbank appears manageable, do you see this as an opportunity to become more aggressive in corporate and retail lending and potentially gain market share, or do you think the competitive dynamics are unlikely to change materially?

I think the key point is that we go back to our plan, and that is Swedbank 15/27, and it's all about being there for our customers: being available, being fast, being approachable, and being proactive. That means that we use that in order to grow our volumes, and we see that, as I talked about, both in the corporate side and the private side, and we're now taking market share, and in that competition, we want to grow.

It's that simple.

From the perspective of your risk appetite, would you expect any changes for the coming quarters given that you don't have that material headwinds compared to your peers?

No, we are a low-risk bank, and we have prudent underwriting standards, and we try to understand the risk and mitigate them. It's a complex world out there, but we will continue to adhere to our principles and get that back to the savings bank's roots.

We do not like when we lend out money to people and companies that cannot pay back, both for our sake, for your sake as shareholders, and for those that borrow as well.

Thank you.

Morning and thanks for taking my questions. My first one: are you seeing signs of deposit mix shift, whether it's in Sweden or the Baltics, on the back of higher rates?

My second question, if I look at corporate lending growth year-on-year in Sweden, it seems a large chunk of the growth has been commercial real estate-focused. I just wondered why this was the case.

I would just expect margins are quite low here. Thank you.

Let me answer the second question. When we look on our lending growth in Sweden, about half comes from real estate sector, and we have a very strong offering there.

We look on the housing market and the corporate real estate market, it's a market that's pretty divided. There are some regions and some areas that go really good, and others that do not so good, and we know our customers, we are close to them, and we do the lending we want to do, and we'll continue to do that according to our prudent underwriting standards.

Jon.

Thank you. When it comes to the mix shifts, in the Baltics, where rates have actually then moved, we have seen small mix shifts from transaction to term accounts for privates.

I think you should keep in mind that last time rates went up, they went from negative to positive quite sharply, and then we saw quite high mix shifts. Now we are coming from a world where we actually have had positive rates for some time even though they came down from the peak.

Some mix shifts we have seen, but keep in mind that the mix shifts went on several years ago.

Thank you.

Yes, hi. I was just wondering, with your strong progression in the Baltics, it looks like loan growth even accelerated adjusted for FX in Q3 and looks stronger than what we see in general statistics.

It looks like you're taking market share, if you could comment on that. Secondly, do you think that may be far from over in the Baltics, right?

Do you think it could trigger some kind of windfall taxes, mortgage fees, or something like that this time around as well?

Jon has been the sort of responsible for Baltic Banking, you have to kick me on my leg if I say something wrong here, but the key point is that we continue to grow in all the three Baltic countries: Estonia, Latvia, Lithuania, and we do that according to our conservative credit origination standards, and we see continued potential for sustainable growth, and we are proud to have them as home markets. Regarding sort of the politics, I'm not going to get into that.

Let's see what happens. We are proud to be a systemic bank in all three, and what we do is important for them, and what they do is important for us.

Jon.

If I can add a bit on the Baltics, even though it was a couple of years since I was there, but no, I think, in general, the starting point is the very, very low leverage both for households and corporates, especially in Latvia and Lithuania. There is a need for investments both on the private and corporate side, also in Estonia, even though they are a bit higher than the other two countries.

When it comes to market shares, our ambition is, as you know from the 15/27 plan, to increase a bit of market shares on corporates in Latvia and Lithuania. We have done so, could have some ambition for some more perhaps.

When it comes to mortgages, it is to remain around the 40 where we are. The market shares are lagging quite a lot in the Baltics, I don't really know how it is now, but we have managed to regain some market shares on mortgages in Estonia based on what we know, where we fell down a bit when margins were very low some year back.

If we are gaining market shares right now, we don't know, but I think we have a good growth and the market is also growing at quite high pace.

Thank you. Just if I may, finally just more of a technical thing, I realize that in the fact book on page 13, your breakdown of IT costs is missing.

I don't know if that's deliberate or if it's a mistake.

It's not a mistake. As we did a reorganization in Q1 where we moved everything that is not central IT or in other things have a need to be centralized from a competence perspective out to the business areas and strengthened the business areas.

That made that breakdown not possible to do anymore. It would be wrong if we continue to do it, so that's why we had to take it away.

It's deliberate and somewhat technical due to how the bank looks today.

Okay. Thank you.

Hi, and thank you for taking my question. It's actually a follow-up on the Baltics, which is that we know that the volume growth figures are likely to continue to be strong for the next sort of 5 to 10 years plus, but also what happens in an economy which is financializing, you would think, is that individuals go more into mutual funds, and thereby, that has sort of two impacts.

One is the obvious one of deposits going into assets under management, which are much lower margin, but also you have a pressure on pricing on your transaction accounts, and you probably see movement from transaction to savings accounts. Just when you do your business planning on a long term view, how do you see deposit growth going forward?

Because you obviously have underlying economic growth, but then you also have the very low level of investments relative to cash savings right now. Thank you.

Technically you're right. If you would look at sort of Baltic private savings in relation to GDP and compare it with other countries, then deposits are more or less on par with the rest of Europe in relation to GDP, but savings in mutual funds, stocks, and also other types of health insurance, life insurances are way below.

This was something that we took a strategic decision on several years ago and said that this over time will be a good business opportunity. We started developing our savings offer in the Baltics, starting developing a savings culture and helped customer to start long-term savings.

It will, of course, mean that to some extent deposits might flow out to this, but it's also so that the economies are growing, meaning that the whole cake is growing. In relative terms, you're right, but I'm not sure it means that in absolute terms that deposits need to go down due to it, since it's in a growing economy as well.

Could I just add there, Jon, and that is one example is micro-invest. What you could do is you can round off your purchases, and those money are then transferred into buying funds.

That's sort of building on the roots of the savings banks movement that we come from, that is that to save before you borrow, and that is also to get people to save into these kind of instruments, and that's one of the reasons why Sweden has been so successful, and a lot of people look into Sweden as an example when it comes to how Europe could strengthen, because the capital markets are important for growth.

Thank you. That was very insightful.

Thank you.

Hello, thanks. Just a couple, if I may.

The first one is, the impact of the IRB model seems to be rather limited. Aside that, now that the situation seems to be kind of stabilizing, do you expect any mitigating actions using SRTs or anything like that to eventually optimize even further your capital structure?

The other question I have is on cost/income ratio. It's been floating around 37, 38% adjusted for the various one-offs over the past year or so.

Do you see this level as tenable, or eventually even improving if rates had to go up also in Sweden? Thank you.

Let me start by the second part, and that is that, as our goal is to reach a sustainable return of equity of at least 15%, and then that's supported by having a cost/income ratio of 0.40 or below, and we have no ambition to change that. Jon.

Yeah. I think we're very happy that we now have gotten clarity on some of the main IRB models that are impacting things, and you saw that that has a positive impact on the way forward.

Then there are remaining models after that. The effect of the remaining models, I said I expect to be net positive.

SRTs, as we haven't done it. I think, in general, that it is a good tool to have in the toolbox, and I guess in the banking environment the importance of it might increase due to the reasons you mentioned.

Should we do something, we will come back and let you know. If I may just add a bit on the cost/income ratio also from Jens there, you know that we try to steer the bank based on the 15% at least return on equity and that we need to produce an increasing profit over time in a stable rate environment.

It will, of course, go up and down short-term based on the rates. This means that we need to be long-term in our planning, and we will not steer year by year.

We need to be long-term in our planning, our focus so that we can create long-term shareholder value.

Very clear, thank you.

Hello. Just two questions from me, please.

I'm looking at slide number 18, and because it's giving the buffer impact, and I just wanted to see what is the total regulatory change. Meaning, I believe that before, your CET1 requirement expectation was 14.2%, now it shifts to 14.1%.

Can we assume that your total change in regulatory requirements has been around 10 basis points lower? That's question number one.

Question number two, as you mentioned on the wholesale funding in Treasury, Stibor changes in Q1 and Q2 were reflected now. How long does it take for your derivative portfolio to react to changes in Stibor?

Meaning, do you have a cut-off date when you say after this cut-off date, the changes get reflected in next quarter, before this cut-off date in this quarter, or how long does it take? Thank you.

Thank you. In general, when it comes to the capital requirements, they are as of Q3 15.1% in REA, which is what you see there in the bottom right on slide 18.

Compared to Q2, it was increased a bit due to the SREP that I went through that increased it by 23 basis points. At Q4, the requirement will be 14.1% due to that we've gotten the approval of the Swedish IRB model and that the remaining buffer Pillar 2 add-on that the Swedish FSA require us to hold until IRB models are improved will be moved from Pillar 2 to Pillar 1.

The combination of those two will reduce the CET1 capital requirement with 100 basis points, 15.1% to 14.1%. Today, we hold around 1,000 billion in REA, just below to be exact.

The impact on our REA based on this pro forma that I gave you is plus 11 billion in Q4 and plus 15 billion in Q1, over the two quarters roughly 25 billion is the increase from this that I show you on slide 8 in REA. I hope that clarified that.

If I look at the funding, generally, we issue say 5-year bond, and then we swap that to 3 months, or 6 months if it were Baltics, 3 months in Sweden to match the duration we have on most of the mortgage book. In essence, it takes 3 months for a rate change to roll through on that swap.

Then, of course, we have issued during this period as well and then swapped during this period, but if you would lock a static balance sheet, it would take 3 months. They are reset a bit on different dates, but a bit more around the IMM dates, but generally, you can assume that they are reset gradually throughout the month.

So 3 months is the answer.

Just one question, is it that they're based on 3-month Euribor, meaning that they resettle every 3 months, or is the settlement date every week, every month or so, but it's based on 3-month Euribor, meaning the settlement date is also 3 months?

We tend to swap it to 3-month Stibor, a lot of it, but they are revalued regularly during this period, and we pay every month on a 3-month, but this rate is reset every 3 months, and then we know that rate on the floating leg for the coming 3 months, and then it's reset again. Which date is reset on, that varies.

It tend to be a bit heavier around the IMM dates, but it is spread throughout the months.

Thank you.

Hi. Here is Sofie from Goldman Sachs, and thanks a lot for taking my question.

Just a follow-up on your capital. I know you target 100 to 300 basis points buffer, but in the past, I think you said that you would be happy to target around 200 basis points.

You're going to be at 275 kind of end of the first quarter. How should we think about special dividends and any share buybacks or excess capital kind of returned beyond your ordinary dividends?

Any kind of directional comments that you could make here? Then just a second quick follow-up, we saw some PMA releases this quarter.

How should we think about further post-model adjustment releases? How much do you have left, and also if you could comment how we should think about the levies, the Swedish banking taxes, and resolution fund fees for 2027?

Thank you.

Thank you, Sofie. Sort of I need to repeat myself, and that is that we have the capital buffer range that's between 100 and 300 basis points, and as you rightfully said, in our 15/27 plan, we target the middle of it.

Let me be clear, we have no intention of holding more capital than necessary. We have a dividend policy of 60% to 70%, and capital release above continues to be a judgment call, and when we present the Q4 and the full-year report, the board will present their dividend proposal to the AGM.

Jon, you want to pick up?

Yep, thank you. The PMA, we have 93 million left of the post-model adjustment now as of Q3.

What it will be going forward, that depends on what happens with the economy. If the economy would continue to improve, the PMA should gradually fall off, because that is sort of the technology of it, that we take a PMA when we see potential negative effects that have yet not been captured in our models.

It can be on individual sectors where we see that there is a risk for deterioration. It can also be so that there is a shift in the macro, but we haven't had the time to or it comes too late for us to get it in.

Then over time, that should go out into the models gradually over the coming months, unless there is something new that our models cannot capture. That is what you have seen this quarter, that we have released it due to exactly this.

That's one. When it comes to the resolution fee, yeah, the fund is almost full.

If it will be ended or not, I don't know, and let's see, it's not in our hands.

What about the other levies that you have? Should we expect them to be stable next year, or any changes there?

We're not going to make any judgments on what will happen with the policies here on taxes.

Okay. Makes sense.

Understood then. Thank you.

I'll steal it from Maria then and say thank you all for joining the call today, and as always, asking challenging and insightful questions. They help us improve, and now we look forward to continue our dialogue on Swedbank with you or some of your colleagues, and thank you all for calling in.

Take care. Bye.