Good morning everyone, welcome to this presentation of Handelsbanken's result for the second quarter and the first half of 2026. The second quarter was yet another solid quarter for the bank.

Operating profit was SEK 6.7 billion and the ROE almost 13%. We saw business growth with lending deposits and asset under management growing in the quarter.

Both NII and expenses were stable, fee and commission grew to close to all-time high, mainly thanks to continued strong progress in our savings business. Income reached SEK 13.5 billion and with expenses of SEK 6 billion, the Cost/Income Ratio was 44%.

Asset quality remains solid and the Credit Loss Ratio was zero. As always, the financial position of the bank was robust.

After deduction of anticipated dividends for the first half year of SEK 4.77 per share, equivalent to 82% of the profits for the period, the CET1 ratio was 250 basis points above the regulatory minimum. In other words, within the target range of 100-300 basis points above the regulatory minimum.

We see over and over again in customer satisfaction surveys that customers attribute a great value to our way of supporting them. As long as there is a clear customer demand for our relationship driven model, we will continue to strive at further strengthening our capacities in the branches even more.

Just like we always have done over our 155-year history. Handelsbanken operates with a business model that some might consider quite unique today.

We believe in being close to customers and in long-term relationships with strong creditworthy customers. Handelsbanken's model is not only customer relationship oriented, it's also run with a prudent risk appetite and always with a long-term focus.

This model has generated very stable shareholder value over time, regardless of external factors such as financial crisis or different types of macro or geopolitical disruptions. The shareholders' equity per share plus dividends has over time grown by on average 14%-15% per year, the stability in this growth is equally as important as the growth itself.

The stability is also related to where we have chosen to operate. Our home markets are situated in the northwest part of Europe, in democratic countries with stable political systems and where rule of law applies.

Countries which also have traits of cultural similarities and shared values. These are also countries where we have recognized a very large scope of potential customers for a bank with our model.

Where we can stand out in our offering and services. Importantly, the cash flow from our customers are also stemming from stable Western European economies.

Simply put, markets where the bank can grow profitability with stability over time. If we'll take a closer look at the recent business development in our four home markets.

All the home markets recorded improved numbers and an overall business growth. Starting with Sweden accounting for 75% of the operating profits in the home markets.

In Sweden, we are the biggest lender combined in the market. Loan volumes have been relatively flat over the past year.

Household mortgage lending has grown, but the corporate lending volumes have been slightly down. When we look at the corporate business in Sweden, we would have been more happy if we had seen a pickup on the lending side.

At the same time, there are a few reasons why we remain optimistic about the corporate business going forward. First, as part of the bank's everyday managing of risk and housekeeping of the loan portfolios, some corporate customers are not on our books anymore.

This means that the inflow of new corporate customers were not visible in the aggregate volume development. Secondly, the interaction and dialogue with corporate customers have picked up materially over the spring.

Increased customer activity has many times been a leading indicator of forthcoming customer demands for loans and other services from the bank. Thirdly, other business volumes with corporates, namely deposits and Assets Under Management, have shown a positive development.

Deposits overall are up in Sweden, but the key outlier when it comes to growth is seen in the savings business, which I'll come back to more on that shortly. Operating profits in Sweden grew by 4% in the quarter.

The Cost/Income Ratio improved to 34%, and the profitability increased to 16.3%. In the U.K., which accounts for 13% of the profits of our home markets, we have for the past year and a half seen a consistent growth in both our household and corporate lending.

Deposits have been fairly stable while the Assets Under Management are increasing, as you can see in the slide. The U.K.

is the market where we stand out the most in customer satisfaction, which forms a solid base to build profitable growth from over time. Operating profit grew by 11% in the quarter.

The Cost/Income Ratio improved to 61%, and the profitability increased to 12%. In Norway, which accounts for 9% of the profits in our home markets, we stated two years ago that we needed to see a better balance between deposits, savings, and lending.

Over the past year, the lending volumes have dropped, mainly due to increased low-margin competition, while deposits have increased. The key improvement in Norway is seen in the savings business.

Over the past two years, the market share of the net inflows into mutual funds in Norway has been materially above the market share of the outstanding volumes. The operating profit increased in the quarter by 18%, the Cost/Income Ratio dropped to 45%, and the profitability improved to 11%.

Finally, the Netherlands, which accounts for 3% of the profits in the home markets. Just like in the U.K., the distance to peers in terms of customer satisfaction is particularly large.

Lending growth has been very strong, up 10% compared to last year. Deposit volumes are slightly up, and also here we have a trend now for numerous quarters with strong growth in Assets Under Management.

Operating profit increased by 13% in the quarter. The Cost/Income Ratio dropped to 54%, and the profitability increased to 11%.

I'm having a bit of trouble with the slides here. Now if we look at the group financials of Q2 compared to Q1, the ROE amounted to 13% and the Cost/Income Ratio was 44%, sorry.

NII was largely unchanged and down 1% adjusted for the currency effects. Fee and commission grew by 2%, mainly driven by increased Assets Under Management.

The customer-driven NFT continued to be stable, amounting to around SEK 500 million in the quarter. In the NFT, occasionally, there can be some swings relating to market valuation effects on instruments used to hedge risk in the funding and liquidity management.

However, the market values of these derivative contracts pull to par over time, meaning that the NFT swings are temporary. In this quarter, we saw such negative valuation effects, leading to NFT dropping to SEK 160 million in the quarter.

Other income dropped, but that was entirely explained by the one-off VAT regain of SEK 1.1 billion in the previous quarter. Adjusted for the currency effects and the VAT regain, total income dropped by 2%.

Expenses were unchanged, adjusted for Oktogonen and currency effects. Credit losses amounted to SEK 30 million, which was equal to a Credit Loss Ratio of 0%.

Regulatory fees increased by 11% due to a booking in Q2 for mandatory interest-free deposits at the central bank covering the next 12 months. All in all, the underlying operating profits decreased by 6%, primarily due to the NFT line.

Adjusted for the temporary drop in NFT, the underlying operating profit was actually up a touch. If we switch over and look at the first half of the year to the same period last year.

ROE again amounted to 13%, and the Cost/Income Ratio was 42%. NII declined by 10% and 9% adjusted for currency effects.

The decline was related to lower margins in the wake of lower short-term market rates. Net fee and commission income, on the other hand, increased by 8% adjusted for FX effects.

The key driver was again the savings business and the strong inflows and positive market developments. All in all, total income dropped by 4% on an underlying basis.

The expenses dropped by 1% despite the annual salary revision that comes into force on January 1st each year, general cost inflation, and increased spend in IT development. The Credit Loss Ratio was one basis point compared to net credit loss reversals last year.

The regulatory fees were up this year due to the aforementioned mandatory interest-free deposit at the central bank. Underlying operating profit was down 10%, explained by the drop in NII.

All the other income lines and expenses developed very positively. If we move over to and take a closer look at the NII development for this quarter compared to the previous quarter.

As I mentioned earlier, the NII was flat over the quarter. It's a positive note that volume growth is now again starting to filter through into the sequential NII development.

Increased lending and deposit volume contributed with SEK 90 million, or 1%, to the NII in this quarter. The net on margin and funding, however, affected negatively by SEK 249 million.

The main reason for decline is divided into three parts. In Norway, there is a mandatory notice period of eight weeks before customer rates can be raised.

This lag effect affected NII by around SEK 40 million to NII in the quarter. This effect reverses when there is a quarter with flat rates.

The remainder of the decline, around SEK 200 million, can roughly be explained by two relatively equal parts. First, market rates increased and resulted in funding costs increasing more than interest rates on certain assets, such as central banks deposits.

There was also an element of lag effect in the sense that repricing of some customer rates come later than the increase of the funding cost for the bank. Secondly, the bank paid out a record high dividend to shareholders of SEK 35 billion at the end of the previous quarter.

This means less interest rate generating liquid assets for the second quarter for the bank. The day count effect due to one more day in the quarter and the currency effects due to a weaker krona on average contributed together with SEK 156 million.

Other effects were minor. The next slide shows the net fee and commission income, how it reached the second quarter with the highest level so far in the quarter and was up 9% compared to last year.

The bulk of fee and commission relates to the savings business, especially in the mutual funds business. The positive effects from the strong net inflows into AUM, as well as positive market developments, increased the savings-related fees by 14% compared to last year.

Other fees were stable. We would like to highlight the consistency in the organic growth of the savings business in this bank.

The bank's market share of outstanding mutual funds volumes in Sweden is 12%. Over the past decade, the bank has attracted 27% of all net inflows into the market.

For the first six months of 2026, 46% of the net inflows into the Swedish mutual funds markets went into Handelsbanken's funds. Over time, these strong net inflows have added significant customer AUM.

Over the past decade, the bank has seen accumulated net inflows of almost SEK 320 billion, significantly outpacing peers. The success comes not only from an appreciated offering and strong performance in the funds over the years, but also the bank's distribution capacity where advisors are close to and have a deep relationship with the customers, parallel to an appreciated offering and distribution in our digital channels.

Over to the expenses. As mentioned previously, costs are down compared to last year, while staff costs are down marginally and other expenses are down more despite the pickup in the IT development spend.

As new technology emerge, such as in the field of AI, it's essential for the bank to embrace the opportunities as we do. The bank invests roughly SEK 3 billion-SEK 3.5 billion per year in IT development.

In Q2, the IT development spend was 6% higher compared to same quarter last year. As we continuously invest in new IT development, we also continuously roll out new tools in the bank, supporting our advisors in creating business opportunities, enhancing customer experience, and to be able to work more efficiently.

Within the very broad space of AI, there is no doubt that there is an abundance of opportunities arising. Today, the bank has several AI initiatives in play, spanning from facilitating simpler tasks relating to administration, to more advanced fields such as AML and transaction monitoring, and of course, code assistance.

At current, the investments in AI tech fits within the current run rate of our IT spending. Next slide shows our asset quality and credit losses.

Over the past decades, credit losses have been very low, which they should be in a bank with Handelsbanken's risk appetite. The difference compared to peers really shows in the volatile times when there is an economic downturn.

The average quarterly credit losses since 2019 has been SEK 3 million per year, equal to 0%. That includes not only the outbreak of the pandemic, but also sharp swings in policy rates and inflation, the disruptions of the supply chain following geopolitical uncertainties with the wars in Ukraine and the Middle East, et cetera.

Still, more or less no credit losses underlying the strength of the bank's asset quality. 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 very strong. After an anticipated dividend for the first six months of the year of SEK 9.4 billion, corresponding to SEK 4.77 per share and 82% of the earnings generated, the CET1 ratio was 250 basis points above the regulatory requirement.

The bank is thereby within the target range of 100-300 basis points above the regulatory requirement. The strong financial position creates trust and confidence as well as a prerequisite for continued stable and profitable growth.

The bank's exceptional position as one of the world's most stable banks was again confirmed by the leading rating agencies during the first half of this year. In Q2, Moody's also raised their Baseline Credit Assessment rating of the bank to the highest level, A1.

This is a level shared with only a handful of banks globally. No other privately owned bank in the world has a higher combined corporate rating by Fitch, Moody's, and Standard & Poor's.

This is achieved by our connected long-term and customer-oriented business model, combined with a low risk tolerance and a very strong financial position. Finally, to wrap up, Q2 was yet another solid quarter for the bank with the ROE of 13%.

Business volumes are growing overall. NII was stable and fee and commission grew, driven by continued strong development in the savings business.

Costs are under control and asset quality remains very strong. The capital position is solid, enabling the bank to anticipate healthy dividends equaling 82% of the earnings in the first half of this year.

We have satisfied customers in the bank. This quarter confirmed by our first position on the savings side in the Kantar Prospera annual survey among institutional asset managers.

With those final remarks, we now take a short break before moving into the Q&A session. Thank you so much.

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

As always, we would appreciate if you would ask one question at a time in order to make sure that everyone has a chance to ask their questions. Follow-up questions are, of course, warmly welcomed afterwards.

With that said, operator, could we have the first question, please?

Good morning and thank you for taking my question. Could you remind us of your strategy for driving growth and profitability in the markets outside Sweden?

Because looking at your returns on allocated capital across your geographic footprint, Sweden delivered return on capital of 16.3% in Q2, while returns on capital in the U.K. were below 12, and in Norway and Netherlands at 10.9.

What are the key levers to improve profitability in these lower return markets while maintaining competitive positioning? More broadly, how do these differences in returns on capital influence your capital allocation decisions across the group?

Are you comfortable continuing to allocate capital to markets that are generating materially lower returns than Sweden? Thank you.

Yeah. This is Mårten speaking.

Thank you for the question. I think I want to start with U.K.

Obviously we have a quarter where we are really happy with the outcome. We see growing volumes both in the mortgage space and also in the corporate space with a pace that we are super happy with.

Generally speaking, in the U.K., we have a huge potential. As Michael said earlier on, we have a second to none customer satisfaction level in the U.K., and we are slowly but surely growing into our portfolio in terms of costs, i.e., as volumes grow, you will see key figures in that market enhanced only by that.

Not only that, we are also deploying multiple solutions to the branch office network in the U.K. to provide efficiency gains that are needed.

You should look at U.K. as we are growing into the cost structure over time as volume will increase, and they do.

For U.K., we are super happy for the moment. The Netherlands, we are even more happy with that if you look at the Netherlands standalone in terms of growth pace, albeit they are super small in the group, of course.

If you look at them standalone again, I couldn't be more happy with the pace. I think, if you zoom in on the corporate lending book, we have doubled that in six or so years, which is fantastic, of course.

Still, they are relatively small. Also, they need to work on their efficiencies in terms of reducing manual processes in the branch office network and so on.

Norway is a different matter, as you know. We have a significant pressure in terms of competition in the Norwegian market and we've had so for some time.

We are not alone in this, of course, and we see margins in our book decreasing, and we see that amongst our peers as well. That being said, if you look around a little bit in the Norwegian business, not only looking at the lending, and you look at the other parts, we are really happy with what we have accomplished in Norway as well in terms of the growth of Assets Under Management, what they are doing, keeping their costs under control.

Also, now we see the deposits are increasing a bit, and we need that quota to be a little bit better going forward. All in all, I would say, remember that we are super long-term in what we do.

In all these three markets, we see potential for our model, working with our decentralized model. All in all, we are happy, even though at some point in time one country might lag behind a little bit.

Over time, we are happy.

Thank you.

Good morning, and thanks. My question is on the margin headwind of SEK 122 million on the NII in Sweden.

Is it on the corporate side you see the margin pressure, or is it on retail? How confident are you given the competitive dynamics we currently see in Sweden that you will be able to pass through the higher funding cost and regain those margins?

Thank you for the question. We see margin pressure both on the mortgage side and also on the corporate side in Sweden.

It's both. I don't want to guide any further, as you know, in terms of what we see ahead for the coming periods.

We can just conclude that in Sweden, as of now, we see competition obviously, that has an impact on the margins.

Okay. Thank you.

Thank you. Good morning, everyone.

Coming back to Gulnara's question on the international division. It's in two parts, but it's the same topic really.

I just wonder, why have you reduced your capital allocation to the division so much in a quarter? I see that what's left in the central units used to be SEK 19 billion in Q1 and is now SEK 55 billion in Q2.

Of course, that helps their ROE on the divisional basis. Also, I struggle to understand why, as Gulnara said, that you do 12% return on equity in the U.K., but that's of course with a fictional tax rate of around 20%, while you actually pay 28%.

Why don't you report your divisions with the tax rate that you actually pay there? Those both relate to the same topic.

Thank you, Andreas, for the question. You should bear in mind that we had the dividend paid out in Q1.

In terms of allocated capital, that obviously had an effect, first and foremost. On the tax question that you had, yes, you can always debate on how we allocate internal costs, for example, taxes, for example.

If you want to have in your calculation in profitability measures for the U.K., another tax rate, please go ahead. You need to deduct that from somewhere else in the group because otherwise the figures won't add up group wise, I guess.

All in all, I guess, again, bear in mind that U.K. is a market where we are super confident that our model is really fit for purpose in terms of growth.

Bear in mind also that we are super long-term in what we do.

Just to understand, I don't need to deduct it on group level because the taxes you pay in the U.K., of course, paid on a group level. Right?

I would say that if you have the group figures in front of you and you allocate more taxes to the U.K., then you need to deduct it somewhere else.

Not on a group level. I can deduct it from other.

In Sweden.

Yeah, in Sweden, that's on that division. I'm just trying to understand the U.K.

compared to the group level.

Got it.

Okay, let's leave it at that. Thank you.

Yes. Hi, good morning.

Just following up there on Norway. It hasn't really changed that much since the autumn of 2021 when you announced the divestments of Denmark and Finland.

I think even Denmark, if I remember correctly, was even more profitable than you are in Norway right now. It is, as you said, super competitive environment with DNB supported by the state.

Nordea will probably tell us tomorrow that it looks awful, and you have the Norwegian savings banks being super strong in the regional areas. Perhaps the change is probably asset management and the saving business to some extent, but it's not nearly enough.

Yes, you're long-term, you've been there for, I think, 40 years or so, the beginning of the 1990s. Isn't it time now, Michael, since you became the CEO, you addressed the cost base to start with.

Secondly, you reduced the capital position, managed it down to within the range. Isn't it time for a strategic review of your geographical footprint?

The same on the U.K. Yes, you want to grow into the current cost base, and we're seeing volumes are growing, and you tapped into the broker channel, but there's not much happening to NII really despite the recent rate trajectories.

Looking forward, you might continue to grow, but if rates in the U.K. progress in line with expectations, I guess it's going to be quite tough for a number of years also going forward.

Primarily, Norway seems like you should basically sell it and distribute the cash to your shareholders. Why shouldn't you?

We've been waiting for a very long time for that business to turn around.

Yes. Thank you, Magnus Andersson, for your question and remarks.

When it comes to the strategic kind of footprint in the bank, that's always a topic that we debate and discuss. You're of course quite right given the history now from my 2.5 years that we've managed to bring down cost and efficiency and with that also been able to pay out and bring down the equity in the bank, which is quite good actually.

Of course, we're looking to which markets we are in and where we should be. I think we are in a good place within these four home markets.

In Norway, if you compare it to Denmark, I was not involved in the Danish decision, but there were so many things both in Denmark and Finland that needed to invest in, so the decision was to divest. In this case, Norway has a very strong offering to the market.

We have already invested in technology and digital solution for customers, and we have also taken down costs there. We now manage to swing a bit in the P&L when it comes to where we get the cash flow from customers to more asset management and capitalize on all that.

I think actually, for now, absolutely we will stay in Norway. We will continue to strive hard in the U.K.

and the Netherlands is there as well and they're growing quite good. You can always debate whether you look short-term or long-term.

My view is that we have a strong business case in all of these countries long-term, and we will absolutely work very hard to make that happen and to be able to grow with scale and do that without increasing costing in these countries and I'm very hopeful that we will do that over time, Magnus.

Yep. Okay.

Thank you. It will be interesting to follow.

Just to add, sorry. You could also argue if we don't have anything right now, of course, on the table, obviously not.

We're looking to also, can we increase growth in these countries by other things like buying and purchasing things. We haven't any discussion about that right now, but we think about that too as well.

That's very interesting because it sounds like you have a different view than the previous at least recent management teams as you missed two recent opportunities in Norway, for example, where you want to grow. You missed S-Bank, and I don't think you even looked at it, and you missed Danske's business although you were actually bidding for Fokus Bank back in the beginning of 2000s.

Now I don't think you were even there looking for it. Would you say that you have a different view that something has changed here compared to previously?

You also got numerous questions in the past about why you haven't pursued any inorganic growth measures in the U.K.

I don't think I have a different view than, I would not actually review on my predecessors. I just say that the opposite of selling as you mentioned, is of course to grow, there we always look into if there is something that we could add on.

We don't have anything at the table right now, my main focus is of course to grow organically. That's how we run the bank.

If we have an opportunity that fits us, we'll look into that. It's nothing new, actually.

Okay. Thank you.

Yeah. Hi.

Here is Sofie, from Goldman Sachs. Thanks a lot for taking my question.

My question would be on Net Interest Income. You got a flag that there was around SEK 250 million got dragged in Net Interest Income this quarter, which was partly from the funding costs and partly on less income on the cash positions.

It also included the Norway notice period impact. Just wondering if any of those impacts would, or if we should expect any of those impacts to kind of reverse in incoming quarters, or it was really more that you had this drag and then it's kind of steady state going forward.

If you could just elaborate a little bit, if there is anything that will reverse in incoming quarters and similarly on the SEK 350 million hit that you saw in the trading line from your hedging in the ALM book. Should we expect any reversal in incoming quarters?

Thank you.

Thank you, Sofie. Starting with the SEK 249 on the NII, I think it's correct to say that the notice period obviously will pass.

That was a Q2 effect only. If we have market rates on a certain level and policy rates at another level, and they stay that way, then obviously our cash position that we have on central bank accounts, that will stay as is in terms of the spread.

That is not a one-off, and the dividend is paid out. We are obviously making money each quarter, but the dividend is paid out.

I think it's a little bit of both in terms of the NII swings that we went through earlier on. On the NFT line where we have valuation effects on derivatives, we have super clear evidence that over time that effect, if you isolate that effect on that line, that will be zero.

That is zero on a quarterly basis average. This quarter it's not, obviously.

That is a temporary effect for sure.

Maybe just on the derivatives position, how would you say that the position is like? Is it in the money or out of the money or like, I assume first quarter it wasn't at zero.

How should we think overall that the position, are you kind of at zero or in the money or out of the money, like the reversal, if you see what I mean?

I see what you mean, Sofie, I will not comment on that. It's one of those topics where I cannot comment.

It's a lot of moving parts and so many factors to weigh in. What I can say that is what I just said, that it will sometimes swing a little bit in the quarters, if you have a 12 months perspective or even longer, then this is really nothing.

Okay. Maybe putting it differently, did you see any positive mark-to-market impacts in the first quarter or Q4 from this derivative position?

Sofie, I think I stick to what I just said. Thank you.

Okay. Thank you.

Hi. Thank you very much for taking my question.

It's a follow-up again on some questions that others have asked on the business mix, which is that, let's take the four countries that you have right now and assume that you're happy with your presence there. Your criteria, to my mind, is stable countries, typically with low debt-to-GDP ratios, where you think you have a competitive advantage or where you can grow over time.

Is there any country that you are looking at where you would potentially look to expand? Because the fundamental issue with investors for you has not been the costs, it's not been the asset quality, it's been the growth profile.

I wonder if at a management level you have looked at country expansion to sort of solve that issue. Thanks.

The quick answer for that is not at the moment. On a longer-term, we always look into how to grow.

Right now we're happy as we are.

Thank you.

Morning. Thank you for taking my question.

I was just wondering why you didn't take the opportunity to reduce the 250 basis points management buffer this quarter on CET1. I also noticed there's a 30 basis points tailwind from the sovereign exposure.

Any thoughts there would be helpful. Thank you.

It's just a formal decision from our point of view that it would take a lot for us to change that in the quarter within the year, such as this one in Q2. We are still at 250, obviously, and we are happy with that for now.

Okay. Thank you.

Thanks. Thanks for taking my questions, and good morning to everybody.

I have just one, which relates to slide four, where you show business growth in all markets. The lending in that chart in Sweden, which is 75% of your business, which makes all the rest of the discussions a bit irrelevant, is flat in one year.

Now, don't get me wrong. I mean, Sweden is not Czech Republic, it's not Hungary, it's not Poland.

The country is growing kind of 3%-3.5%. You're flat, which means that in real terms, you are actually down in one year.

Can you elaborate why you're down in real terms or flat in nominal terms when the rest of the country is actually moving up a bit, at least a bit? Is it a deliberate decision?

Can you elaborate on that, please? Thanks.

Yeah. Thank you for the question.

It's a fairly relevant one because as you say, Riccardo, that it's obviously relevant for the group in terms of the volume that we have in Sweden. If you look at our performance in terms of lending growth in Sweden over longer periods of time, then you will see that sometimes we are a little bit above the market, and sometimes we are lagging behind the market.

It's quite correct what you state, that as of now, and since a couple of quarters, we have been lagging behind the growth in the Swedish market. If the question is if we are happy with that, the answer is obviously no.

We would have liked to see other figures. What is comforting is what Michael alluded to earlier on, that we see activity levels out in the branch office network that are really high, and we have seen also effects of that in the deposit side, and we have also seen streams from the corporates into asset management.

Obviously, we would like to have seen that activity materialize into lending as well. Also bear in mind that over time, we have also connections in our corporate lending book that are not fit for us anymore for various reasons, and then we exit them.

Bear in mind that this is a net figure as well. The underlying figure is that we have attracted new customers, but we have also, obviously, customers that have left the book.

Fine. Thanks for that.

Your risk cost is zero. It's not the time maybe to, if I may say, to take on board some extra risk because even if the cost of risk goes up to five basis points, that probably would be worth doing it instead of having zero risk cost whatever happens on this planet, and having the loan book going nowhere when the rest of the world is moving.

Don't you think it's time maybe to take a little bit more risk on board given that you are starting from zero?

How it works in this bank is that the branches are actively chasing business locally within the corporate and private market, of course, and they choose where they find it the most attractive for our shareholders over time to do the lending. It's not that the CEO of the bank actually steers exactly how the risk should be taken in the bank.

That's not how it works. We manage the portfolio very carefully.

I think in general, banking is about lending out money and then getting them back. That's the foundation of banking.

It's not how much you lose, not for us. There can be so many different ways of do banking.

This is the way we do it. We don't like losing money.

We want to have it back. We do business with very highly rated customers, profitability is business with these guys.

Then they pay back when they don't need the money anymore. That's how we run the bank.

That's how you should look at us. When it comes to taking more risk, we take the proper risk in all of our home markets, in all of our branches.

They choose where they want to do business. I support that.

Okay, thanks.

Hi, thank you for taking my question. Just it was similar to the last question, but could I ask, you're mostly a real estate lender, both on the corporate and the retail side, and over the last decade, there's been a number of floors put in, which I guess has made the risk-based approach to lending a little bit different.

Have you adjusted in the branches, I guess, the lending standards to reflect that very low-risk lending and slightly higher risk lending carry the same capital charge? Also, if I look at your commission income, as a bank, it seems like the type of business you do generates relatively low commission income compared to your peers.

I guess all these things kind of contribute to your lower than peer ROE situation. I know you let the branches run it, but do you think given where you sit in terms of profitability, that you may need to rethink a bit here how you're running the bank?

Thank you.

Yes, okay. Let me start from the back end of that question.

Obviously, yes, we are looking into increasing the capital light income, which will have an effect on the ROE figure, obviously. As you have seen, we have put some efforts into growing our savings business, i.e., the Assets Under Management for quite some time.

Yes, it takes time to move those figures. We are moving in the right direction in terms of increasing that actually in all four home markets for the quarter.

Obviously, we are helped with the market swings also a little bit, but if you deduct that, we see healthy inflows, at least in three out of four home markets this quarter. Yes, we are constantly looking into how to increase our profitability.

That's our job, right? Yes.

Again, we run a decentralized bank. We are into meeting our customers and take a broader look at their needs and the needs from them in the future as well.

Out of that, we are building the business from a profitability standpoint. Michael?

Yes, I just want to add that if you look, of course, you're right in if you look at the balance sheet where we have the vast majority of our exposures towards the real estate part of the sector. When you visit a branch in Handelsbanken, most of the works that they do in their business is not with the few real estate corporates.

It's the huge amount of SMEs and mid-corps that they work with every day, which do not lend as much as a real estate company do because that's part of their balance sheet. Working with these SMEs, there's so much opportunity to do more than just lending.

You do business with the owner family. You do business on the asset management side.

You do payments. You do a lot of stuff that really brings on return on equity in these SMEs and mid-corps.

That's what they put most of their time in the bank. It's how you measure it.

If you measure just on the balance sheet, yes, that's very heavy on that side. If you measure on workload and business opportunities and the workflow they do, that's more into these regular kind of business, not the real estate corporates.

Just on the risk weight floors, do they filter into the sort of? I guess your attitude has been that you don't have loan losses, and as you said, you want your money back.

The regulatory environment changed quite a lot in terms of the capital charge that you're exposed to, and thereby the ROEs.

No, I think the way you should see it is that if the bank is faced with high capital requirements for a product, that's obviously a cost that the bank has to take somehow. How we allocate those costs within the bank is nothing that we disclose in particular.

I don't think that you necessarily should put the two together, the capital requirement to the credit losses. I think they're two separate items, really.

Okay. Thank you very much.

Yes, thank you very much for all the questions and for your participation. As always, if you have any follow-ups, you know where to find us in the IR department.

With those words, again, thank you very much, and we wish you all a very nice summer. Thank you.