Multitude (Xetra:MULT) Q2 2026 Earnings Call

0:00 Good morning from Helsinki, Finland, and welcome to Multitude Group's Earnings Call for the First Six Months Ended 2026. My name is Oddam Tonning, Head of Iron Treasury, and I'll be your host today. Today's agenda, Multitude's CEO, Antti Kumppelainen, will walk you through De Pere's results, which will be followed by a financial review by our CFO, Bernd Eger. Following the presentations, we will open up for questions over voice and chat. Antti, please go ahead. Thank you, Adam. Good morning, and thank you for joining us. My name is Antti Kumppelainen, CEO of Multitude Group. During today's call, our CFO, Berneger and I will walk you through Multitude's H1 twenty twenty six results. The first half reflects continued disciplined execution of our strategy.

0:46 We are seeing stronger diversification of our revenue streams, further improvement in asset quality and a clear acceleration in profitability from the first to the second quarter. Let me first briefly recap who we are and where we are heading. Multitude is a pan European fintech operating with one single EU wide banking license and serving customers across Europe. We operate three business units on one shared growth platform, serving consumers, SMEs and institutional customers. The company was founded in Finland in 2005 and has been listed on the Frankfurt Stock Exchange in the prime standard since 2015. In 2025, we generated €257,000,000 in revenue and €26,600,000 in net profit.

1:34 We also continue to maintain our dividend ambition of distributing between 2550% of annual net profit. So this is a business with more than two decades of operating history as established regulated platform and significant opportunities for profitable growth ahead. Today, there are six key takeaways we would like to highlight. First, H1 net profit amounted to €13,100,000 Importantly, profitability accelerated clearly during the second quarter, in line with the expected phasing of profitability through 2026. Second, asset quality continued to improve. Impairment losses decreased by 17.7 year on year to €34,900,000 while our loan and investment portfolio continued to grow.

2:25 Third, fee and commission income more than doubled to €12,600,000 compared with €5,300,000 in H1 last year. This demonstrates continued progress in diversifying our revenue base and building recurring fee income streams. Fourthly, we completed the acquisition of Sorte. The transaction supports our revenue diversification strategy and adds complementary capital light fee income business to the group. Fifth, our strategic investments continue to perform strongly with our share of results from associates doubling to €2,000,000 from €1,000,000 last year. And sixth, we confirm our €30,000,000 net profit guidance for 2026 together with the outlook of 20% annual net profit growth in years 2027 and 2028.

3:17 Turning to the group highlights for first half of the year. Revenue was almost €127,000,000 The development reflects deliberate changes in product offering and portfolio composition and the corresponding lower interest income partly offset by very strong growth in fee income. Fee and commission income increased by over €7,000,000 year on year to €12,600,000 driven mainly by Consumer Banking and now also including the contribution from SORTER since the consolidation date. SORTER will continue operating as an independent company under the current management who have demonstrated their ability to build, run and scale the business extremely well. SORTER is a pure digital financial platform and a market leader in Finland with more than 30 banking and financing partners on one side of the platform, offering consumers and SMEs financial solutions and on the other side of the platform over 120,000 credit applications made last quarter only.

4:19 Now it's your time to make your own evaluation about Sorter business and its impact for Multitude's strategic value as the Sorter full year run rate for revenue is €25,000,000 and profit of €5,000,000 with a 50% growth. During the first half, our asset quality also continued to strengthen. Impairment losses decreased by 17.7% to €34,900,000 Net loans and investments increased by 15% year on year to €980,000,000 demonstrating continued strong demand across our businesses. Net profit for the first half was €13,100,000 This is in line with our expectations and reflects the profitability phasing we have communicated with a clear step up in the second quarter.

5:05 Going forward, our focus remains unchanged: accelerate profitable and scalable growth through organic execution, partnerships and selective MFA continue to diversify revenues through recurring fee income and maintain high asset quality as we go forward. Consumer Banking. This is our largest and closest business unit. The first half reflects continued portfolio optimization, improving asset quality and very strong progress in fee income expansion. Interest income and profitability were impacted by deliberate changes in portfolio composition and product offering, in line with the asset quality initiatives we have been implementing. At the same time, fee income increased significantly to €11,300,000 compared with €4,300,000 in H1 last year, now also including the short term contribution from the consolidation date in late May this year.

6:02 The portfolio continued to grow by 6.2% year on year and is now at €537,000,000 while impairment decreased by more than 20%. That's a great result. This is exactly the direction we want to see, continued growth together with a stronger risk profile. Going forward, our focus remains on diversifying revenues, increasing recurring income streams, disciplined growth through organic execution, partnerships and again selective M and As and further improvements in profitability, scalability through cost discipline, asset quality and automation. In SME Banking, the key focus remains execution, efficiency and automation on our path toward profitable growth. We do recognize that the turnaround in SME Banking has taken longer than we originally expected and we have made changes to get there faster.

6:55 We can already see the growth momentum in the portfolio. Net loans and investment increased by 15.5% year on year to €171,000,000 and the secured lending now represents 32% of total portfolio. Revenue increased slightly year on year, while the contribution from recently originated loans is expected to materialize progressively over time as the portfolio matures. Profitability in the first half reflects a temporary investment phase supporting future growth, including organizational transformation, product development and technology investments. Importantly, while the absolute level of impairments increased driven by portfolio growth, the impairment ratio remained broadly stable.

7:41 We can already see that these actions and results will push us to sustainable profitability and growth. We are currently close to a point of a breakeven, and we trust to deliver for a full year of 2027 a solid positive EBT. Transformation is happening already, and we can already see it. Wholesale Banking. Yes, Wholesale Banking continued its very strong growth trajectory during the first half. Net loans and investment increased by 37% year on year to €271,000,000 supported by strong execution across the secured debt deal pipeline. Revenue increased by almost 65% to €15,700,000 while profit before tax increased to €3,500,000 from €400,000 in H1 last year. That's a big jump.

8:32 So profitability growth continued to significantly outperform revenue growth. We are also building more scalable origination capabilities through automation and faster credit decisioning in Secured Debt, while Payment Solutions continues to onboard new customers. Going forward, the focus remains on growing the Secured Debt portfolio, expanding the Payment Solutions customer base and increasing cross selling opportunities. Our ambition for Wholesale Banking remains very clear, and we continue to see substantial long term growth and profit potential in this business unit. With that, I will now hand over to our CFO, Boer Neger, who will guide you through the H1 financials and of course the underlying dynamics in more detail. Thank you very much, Antti. Welcome everybody. Good morning from pretty cool Helsinki, Finland.

9:25 Let me walk you through the H1 results. The key messages on H1 are essentially threefold. First, and this is my personal favorite, I repeat that all the time, but I think it's really from a strategic perspective really important. We are succeeding in diversifying our revenue composition. Fee income has meanwhile become a real meaningful contributor. Second, credit losses improved materially again compared with last year. And third, we see a clear net profit step up in Q2, especially from Q1 to Q2, almost doubling net profit, well on track for the guidance. Let us go to the details and start with revenue. Interest income, million in H1 twenty twenty six compared to EUR128 million last year, a decrease of around about 10%.

10:15 But as pointed out, this reflects the actively driven change in portfolio composition and product offering in Consumer Banking. So exiting short term non recurring business, focusing on recurring sustainable business. That is what the game is about. This is consistent with our group wide focus on higher quality and sustainable risk adjusted returns. By the way, adjusting for the impact of exiting non core businesses and for the impact of strategic product adjustments in those markets, like for like revenue would actually be above 25 level. Fee and commission income. Extremely strong development in H1 increased to €12,600,000 compared to €5,300,000 to a plus of 136%.

11:02 Key drivers are partnership driven fee income secondly, services to external FinTech partners number three, payment business and finally, the acquisition of Sorta, reflected from the acquisition date and consolidation date 05/20/2026. So four independent strong drivers for our fee income business. In addition to strong fee income development, net operating income was also supported by positive fair value effects of 2,200,000. This is related to positive earn out revaluation effects from sold non core business. Businesses. So we're creating a Leiden organization, but still benefiting via earn out from sold businesses. Also, other income increased significantly to 2,600,000, which is a positive effect related to the SORTER acquisition.

11:52 And finally, on another positive note, results from associates doubled to EUR2 million in the first half of this year compared to EUR1 million last year. As a result, net operating income was 108,000,000, already very close to H1 25 level despite the deliberate portfolio optimization. Again, comparing like for like, net operating income would be significantly above 25 level. Let's take a short look. We will go into more detail on credit loss performance. This remains to be a key positive driver when it comes to net profit development. Impairment losses decreased to 35,000,000, an improvement of SEK 7,500,000, almost 18%. We've touched upon this in the last couple of earnings calls.

12:39 We can stay on the message of further improvements in the first half of twenty twenty six, especially in the second quarter. This is extremely important for us because it was not only achieved on the basis of a stable portfolio, but achieved while net loans and investments continued to grow. On cost, personnel expenses and general and admin expenses increased moderately, reflecting continued investment in our growth strategy. Selling and marketing expenses increased most visibly some SEK2.5 million, SEK1.4 million out of that reflects the impact of the SORTER acquisition, which is money wisely spent, given SORTER's excellent net profit contribution. This all adds up to profit before tax of $15,100,000 compared to 16,300,000 in H1 twenty twenty five net profit 13,100,000 compared to $14,200,000 last year.

13:38 Important to us is the dynamics. Q2 showed a clear acceleration. Net operating income increased from €51,000,000 to €56,000,000 Profit before tax from €5,100,000 to €10,000,000 Net profit increased from €4,400,000 to €8,700,000 in the second quarter. So the fact that doubling and this dynamic is in the end what gives us a lot of confidence for our full year net profit guidance. Let me very briefly talk about assets. There are two main messages I want to bring across. Number one, net loans and investments. This is super important to understand as it is also going to be one of the profit drivers for the remainder of the year. All businesses are growing compared with end twenty twenty five. Net loans and investments increased by 40,000,000 from $940,000,000 to $980,000,000 compared to last year plus 70,000,000.

14:34 Also important diversification. It's not a business or growth that is driven by one business unit, all business units portfolios are on a clear growth path. Cash and cash equivalent, that's in the MD engine, hold a little bit more than $420,000,000 cash on the books. This represents sufficient resources to continue growing our business portfolios for the second half of this year and beyond. The increase, for those who are more interested in details, intangible assets and goodwill is related to the investment in SORTA. Again, a fast growing, capital light, fee income oriented fintech platform, so exactly what we have been wanting to add to our portfolio for quite some time. Very strong financial investment. In summary, the asset side shows continued customer portfolio growth, a strong liquidity position and the positive impact of the most recent acquisition.

15:29 Liability and equity. On liability and equity side, the key message remains unchanged. You're familiar with that customer deposits are the cornerstone of our funding model complemented by capital market instruments and regulatory capital apparently on the level of the bank. Deposits up to 1,200,000,000 equity increased to EUR243 million compared to EUR208 million end of year. This increase was mainly driven by the successful placement of a EUR70 million perpetual bond instrument in the first half of twenty twenty six. That in turn results in a very strong net equity ratio, including regulatory capital of 24 H1. Let's take a little bit of a closer look to the respective businesses, to the segments and talk about their performance, consumer banking remains highly profitable, while moving to a better revenue and risk profile, and super important for us, it's back on growth track. SME Banking continues to invest into portfolio growth and scalability, and Wholesale Banking continues to deliver strong growth and very convincing profitability dynamics.

16:41 Talking about Consumer Banking in more detail, interest income decreased by some 19% to million compared to last year, but as pointed out, this is a temporary reduction and it's intentional. It is driven by us exiting from non core businesses, short term businesses that we sold and by temporary effect related to product adjustments in a number of markets where we already see a positive turnaround trend. Like for like business is on a growth path. Q2 revenue in Consumer exceed Q1 revenue by close to €3,000,000 Fee and commission income in the Consumer business increased by almost 166% to 11,300,000 supported by both organic contribution, organic fee income stream and the consolidation of SORTE. But it's important to understand whilst the SORTE contribution is meaningful with some EUR 2,900,000, also excluding SORTER, the organic growth of fee income would be equivalent to almost doubling the fee income in the consumer business, so really top performance.

17:49 Extremely positive impairment loss development decreased by more than 20%, CHF36 million to less than CHF29 million, so top performance. And all that results in profit before tax, CHF15.1 million compared with CHF17.4 million last year. And again, while H1 ABT is technically in a way lower year on year, Q2 was meaningfully stronger than Q1, with Consumer Banking profit before tax increasing from EUR5.2 million to SEK 9,800,000 in Q2. So really extraordinary performance of the team. In SME Banking, net loans to customers increased by 15.5% compared to last year SEK 171,000,000. Interest income picking up a bit, 2.5% growth, and net operating income also increasing by close to 2%.

18:42 The revenue contribution from new volumes is expected to materialize progressively over time. Credit losses remained pretty much stable in its totality. Profit before tax still negative 3,500,000, but as Antti pointed out, this reflects investment in growth in automation, in data and in risk innovation. And our focus and especially the SME team's management focus is to turn this business into profitability, and we are very well on track, pretty close to breakeven and super confident that for the full year 2027 we will deliver positive results. Wholesale Banking, very strong. H1, a little bit repetitive, but I need to stay on the message. Interest income increased by 70% to 14,500,000.

19:30 Net operating income increased by 87% to almost €10,000,000 And profit before tax, still it's an early stage business, but already €3,500,000 positive in the first half of twenty twenty six compared to 0.4 growth factor in terms of profitability more than seven actually more than eight. Also compared with Q1, Wholesale Banking improved massively with profit before tax increasing by one third from 1,500,000 to 2,000,000 in the second quarter only. Asset quality long term trend continues. You see on this slide impairment losses relative to our total portfolio, so net loans and investments, and we see a significant decrease which is equivalent to an increase in asset quality.

20:18 Group level credit loss is down 7.7% year on year to 35,000,000. This is a strong result again, particularly because net loans and investments are increasing. So credit loss is down 18%, portfolios increasing 15%. What that means is, we're not only growing the portfolio, we're doing so with a much, much better risk profile. Quarterly impairment loss is also improving from Q1 twenty six, 1.8% ratio down to 1.6%, so really top trend. And the key drivers, you are familiar with that in case you joined recent earnings calls, they remain the same, enhancing scoring and underwriting, continuous model upgrades, stronger operational processes and of course a focus on better asset classes.

21:11 We can go a little bit more into detail, but I will speed up a bit on the credit loss development on a segment level. Key message is basically simple. This improvement in asset quality is visible in all businesses. In Consumer Banking, massive improvement, million compared to EUR36 million, so SEK20.5 million reduction. This is really massive and this improvement continued during the second quarter, SEK15 million credit losses in Q1, SEK13.8 million in Q2. So again, really strong performance in the second quarter. SME banking EUR 5,500,000 compares to EUR 4,900,000. So technically in absolute numbers a slight increase, but that is in the end the investment in the portfolio growth, quite significant portfolio growth already and with a time lag we now expect also revenues to come and in the end help us turn around the business to profitability.

22:06 So absolutely well on track and performance metrics in SME are absolutely stable. And in Wholesale Banking, very low impairment losses €700,000 50% less than last year. In this business, apparently, there's a less granular business, movements are more driven by IFRS requirements and reserves, but the full and that's the key message here, the full portfolio remains collateralized. There are no unsecured exposures at all in the Wholesale Banking loan and investment book. Funding and capital structure, as pointed out, our funding base remains diversified and scalable with customer deposits as the cornerstone. H1, we successfully issued this bond I made reference to.

22:52 This is important as it strengthens equity. This is an IFRS equity instrument and is an excellent addition to deposits and the Tier two instrument that we issued on the level of the bank. So very solid funding and capitalization mix. An important aspect over the last couple of quarters is also that we managed to reduce funding cost, weighted cost of debt funding decreased to 3.34 in Q2 from 3.4 and around 4% last year, quite a significant decrease and that apparently is also quite important when it comes to net profit performance. In short, funding stable, diversified and cost effective. There's one final statement I would like to make as regards funding.

23:38 We are evaluating the issuance of an additional Tier one instrument at the level of the bank in order to further strengthen the capital base and hence the growth potential on the level of our regulated entity. Finally, capital market guidance and indicative targets for 2026, we confirm our net profit guidance, 30,000,000. H1 profit amounted to CHF 13,100,000 the sequential development from Q1 to Q2 supports our confidence. Q2 net profit 8,700,000, so again almost doubling from 4,400,000 in Q1, so the direction is clearly positive. Expected drivers to get us to 30,000,000 net profit are: number one, growth dynamics in all businesses, including Consumer Banking. So we are in a positive growth trajectory mode already and expect that that continue for all businesses.

24:36 Secondly, significant improvement in Capital Box financial result. So if we manage to reduce negative contribution and we will manage completely in the second half of the year, then this would have a seven digit impact on net profit apparently and we're super confident to achieve that. Sorta net profit contribution is one of the drivers. And finally, our excellent, I really have to use this term as it actually is even better than we had budgeted, our excellent credit risk performance development. That means for 2027 and 2028, we of course stick to the guidance to improve increase our net profit levels by 20% respectively. I would like to go back to the key takeaways and conclude our presentation with these key takeaways that Antti used and referred to as an opener. Net profit EUR 13,100,000, absolutely in line with the expected phasing throughout 2026.

25:34 So we're very optimistic to get to EUR 30,000,000. Asset quality better than ever. Impairment losses down 17.7%. Fee and commission income on all time high, more than doubled to SEK12.6 million. SORTA acquisition supports revenue but also profitability nicely. Strong strategic investment performance, doubling associate contribution to EUR 2,000,000. And finally, as just pointed out, I would like to reiterate EUR 30,000,000 guidance remains valid for this year. With this, I hand back to you, Adam, and happy to move on. Thank you. Yes, we will now continue with a question session. And we have the opportunity to ask questions over voice. We will shortly hear an instruction on how this works.

26:43 Very good. Meanwhile, we can start with some questions that we have received over text. Starting with questions from Harald Hoff, MWB. How has the customer sentiment and credit demand developed in Q2? And what are you seeing into H2? Is borrowing appetite picking up? And are there differences across markets, Hampty? Yes. We the result tells already that the portfolio is growing, which means that, obviously, the demand is there. And this goes around all of our segments. We have to understand now that, for instance, when we work within Wholesale Banking business, there's also underlying assets in Consumer and SME lending there as well, and we can see that there's need for our Wholesale Banking solutions, so competitors are also growing or the other players in the market. When we talk about our Consumer business, we definitely can see that portfolios are in good shape.

27:42 Our risk profile is getting better and better all the time, and consumers still need credits and good, quick solutions, which we can provide. Same goes for the SMEs, 15% portfolio growth. There is demand. Very good. And turning into a few questions from Roni at Inderes. First of all, Sorter. How much did Sorter support fee income growth? And what was the organic development of fee income? And how much does support your earnings? Altogether with $12,300,000 fee income, essentially doubling from last year, sort of contribution in H1, essentially the revenue generated after May 20 is $2,900,000 And that means that even if you take out this 2.9 completely and compare organic development like for like, then this would get us to 8.4.

28:39 So still almost doubling the contribution, the fee contribution compared to last year. So sort of super important for a number of reasons, even more strategically I think. But from an organic growth development perspective, are absolutely happy with almost doubling the fee income. And by the way, fee income is something that is quite meaningful already both in the Wholesale BankingPayment and in the Consumer Banking business. Staying on Sorter a bit, a question from Pedri Leblard. You said you acquired a minority stake in Sorter. How big exactly how big are the minority interest? And how will it impact the P and L in 2026? And I assume the Sorter revenues will go into fee income.

29:27 Yes, absolutely. Sort of income or revenue will be reflected in fee income. Regards to the percentage, we currently hold 1%, so fully consolidated entity. And the contribution for second half was the Yes. How much is it impacting in 2026? Well, I mean, it's a little bit difficult to give a guidance for a sort. The way we look at it is so that we see €12,500,000 Solta revenue in the first six months, a little bit more than €2,000,002,300,000 profit level. So if we assume that profit remains on the same level, then this means in the end twenty five million run rate revenue and close to EUR 5,000,000 profit, out of which between EUR 2,000,000 and 3,000,000, 2,500,000 would be reflected positively in our H2 results.

30:27 Yes. Thank you. Continuing with Ronny's questions, any updates on the plans regarding Lehabanque? Have you managed to advance any common strategic initiatives? And then we also have another question from a private investor on whether we have sold the portfolio to Leabank in Q2. Yes. And this is I can start with this. So we are extremely happy in Leobank, and we see it as a strategic investment. It's also really good financial investment for us. So we can see that the income from consolidated entities is obviously sorry, associated entities is coming quite much also for Leia Bank. So we are looking all the time what different options we have on strategic cooperation possibilities.

31:15 We have to remember that these are two independent companies, Multitude and Leia, which are operating fully independently. Yes, we did sell our prime lending portfolios to Leia Bank since that's the business that Leobank is much more close to, and it makes more sense that they can operate continue operating in those portfolios, and we are then focusing more on our customer base that we already have. So yes, we sold a couple of portfolios in The Nordics to Leibanc. Indeed. Thank you. We have a few questions on share price development in general and versus our vision of €1,000,000,000 valuation 2028.

32:04 How do you see the path forward to this target? First of all, what I can say about the targets is obviously that our net profit guidance, we can confirm that €30,000,000 is where we really see that we are going this year, followed with 20%, 2728%. So until now, what we have guided during the last five years, actually six, I believe, already, so we have kept. And we see that we are diversifying our business. We have much more fee revenue coming in. So we are expecting that to reflect, of course, in the valuation, which is then decided by you, our investors, in the market. I'm confident that we are really on the right path.

32:54 We have to continue keeping our promises. We have done it so far. We are diversifying. We told you a few years ago, we will diversify. We have done it and we will continue on that path. You. Just one sentence, if I may ask you for the first time, we have more than 10% of revenues are contributed from fees. So this is no longer a tiny add on. This is core of our strategy. And apparently, it could have a positive impact on valuation as well. I'm not giving any statements on how we look at it. But theoretically, one could assume that a increasing revenue stream that is not tied to risk income, that is not tied to a capital intensive business that is growing in the case of sort of 50% plus.

33:42 Without sort of we're growing the fee income 50% plus. So I would at least see reasons why reasons to be optimistic about the value creation potential here. A bit on the same topic, we have a question on how we look on buybacks over high dividends and what is our reasoning there, Bernd, in comparing these two options? Well, in the end, are pros and cons for both. We did the buyback program a while ago. I think currently, focus would rather be on generating profits and distributing profits to holders of all equity and debt instruments, which means rather dividend than buyback.

34:29 One of the reasons is the practical regulatory limitation that limits the ability to buy shares back quite massively. And on top of that, we have made a commitment to distribute 25% to 50% of net profit as dividend. We want to honor this commitment. And thirdly, we have ambitious growth plans and do not think that we would want to decrease equity base below that. Yes. Thank you. Continuing on to earn out. How do we look on the earn out timings for the rest of the year? How much are we still expecting in 2027? Expectation means a little bit of an element of speculation here. I can take a look back, maybe shed a little bit more light on performance of those sold businesses and our contribution in 2026.

35:25 We have collected between 1,000,000 and 1,200,000 from earn out on a monthly basis. This is actually better than we expected. This also resulted in this EUR 2,200,000 revaluation positive contribution. But economically, I think the positive impact not reflected in the P and L, but in cash is even stronger than this SEK 2,200,000,000, in fact SEK 6 plus million. And yes, we are supporting the new owners of those businesses where we can and hope that they will continue performing well. Thank you. A few questions from Julius at Nuevois. First of all, the H1 net profit was SEK 13,100,000 against the SEK 30,000,000 full year guidance. So H2 mathematically needs EUR17 million.

36:17 Could you walk us through main operational and one off drivers for that step up and potential one off drivers? Yes. First of all, mathematically, absolutely correct. We have but I would like again to put it into perspective. So after Q1, there were some questions around net profit level back then fourteen point seven percent or whatever percent of total €30,000,000 so €4,400,000 out of 30. Now we are now it's half time and we have achieved 44%. So that's a very good starting point for the full year with a couple of drivers. Asset quality much, much better than even expected and super confident this will that this path will continue. The most important one is growth. We are on a growth path in all three businesses.

37:02 That's much better. The growth dynamics are much better than compared to last year. We have an additional profit contributor with SORTA. So taking all that in combination, other than that, we don't need one offs in that sense. We should be at least I am and speaking on behalf of Antti as well, we are very optimistic that we get there. Good. And a second question from Julius. Does it take to make SME banking profitable? What it takes is continue with the developments we have now seen. So I have to remind you that SME Banking is growing at the moment. We grew with 15% in the portfolio. We are really, really close to having a breakeven point already.

37:58 And we have made lots of investments during the second quarter, especially this year. So we have automated much more quite much automated business line already, Lots of changes in the way we operate in SME Banking as well. And we can see now that these are bearing the fruit. So operational transformation, cost to income ratio has to go down. We have to keep the same good part in our credit losses, which we can see the impairments are in good shape. And it's now about pushing a bit more on the gas pedal once we know that we can do it, and I believe we can do it now. So I'm seeing SME banking as a positive sign going forward.

38:46 Good. Two questions related on the same theme. So the improvements in asset quality and consumer, we have now had a quite long run of significant improvements. Is there further room to improve still? That's a question good question. I would rather speak about we can see a long term trend already across all our business units, across the whole company. And I can say that we see the trend continuing, as Bernd said, that we are extremely we see positively about this. For how long and how long does it go? It's impossible to say, but there is no reason to believe that it will change overnight now to something else.

39:36 We have worked deliberately on this way that we make sure that whilst the portfolio grows, the credit losses are coming down even more aggressively. So the momentum is there. It has been there for a few years already. We see the trend. I see no reason that it wouldn't continue. On the back of that question from Marc Lutte. As the impairment losses have decreased significantly, how come that the profitability hasn't increased significantly as a result of that? Is it because the impairment losses decreased mainly because of a smaller loan book or rather than a better risk profile? It goes actually hand in hand to certain extent that we can see also that yield is a bit lower from in our loan book than it has been a few years ago. So this is a really natural decision that slight decrease in yield getting much more better customers in that it also tells that then the losses are coming down.

40:38 And I mean from to put it in longer term context, if I may, I would not necessarily agree that profit is not picking up. We had CHF 20,000,000 net profit two years ago, then we have issued the CHF 23,000,000 guidance. We have elevated this lifted this guidance up to 24,600,000 We have overachieved the higher end of this guidance. Now we're increasing or we are looking to achieve €30,000,000 which would be all time high SEK 26,600,000 was already all time high net profitability. So this is one of the drivers, not the only one luckily, but one of the drivers why we are on an all time high level when it comes to net profit. Thank you. Another question from Julius. Cost to income ratio was 5552% in Q1 and Q2, which means higher than last year. And this I understand this should be temporary, but what do you see as a normalized ratio levels here and also looking into versus our forward target?

41:42 Yes. First of all, yes, we see a temporary development that should not necessarily be seen as conflicting with our long term ambition. The long term ambition is to go to this 40% level if you now exclude external factors, M and A transactions and all that. The target is 40% at the end of twenty twenty eight and that remains valid. Important for us is net profitability first. So if we invest something that has a short term negative impact on costincome ratio, but a positive impact on profitability as technically sort of acquisition has, it's driving up costincome ratio a little bit, it's driving up the net profit quite significantly.

42:31 So profitability first, but from my perspective, this 40% target remains valid. Thank you. And one question from Frank Leman on Wholesale Banking. How do you manage concentration risk regarding counterparties? Well, that's quite traditional way to manage it. We have our counterparties are in multiple different jurisdictions, and we also make sure that we have a different type of counterparties. So different type in a sense that they come from a quite similar pool, but obviously we make sure that we don't tap into the same markets as our own customers directly, for instance. This is important. And also geographical diversification, we make sure that loan to value levels are good and everything is really, really well secured.

43:30 So from this perspective, we are in a really, really good position. Like Bernd already said, there is no unsecured receivables at all in our Wholesale Banking. Everything is secured from our side or to us, and we are confident this book is of good quality. Thank you. We will then take the final question for this FAQ session from Thielo Pass. Congratulations to the results. On the reduction in impairment losses, one, could you explain in layman terms how the impairments are calculated? And two, has the parameters changed over time, let's say, a year ago to make it simpler? Should I start?

44:17 You so much. Now first of all, we are comparing like for like. So this is not the there are neither significant one offs in these improvements. This is backed by substance. And also the relevant principles have not changed. So over the last couple of years, we have consistently applied IFRS nine principles for all our portfolios. So this is completely like for like. How does it work? In the end, for the upon issuing a loan, the expected credit loss for twelve months needs to be reflected as a credit loss impairment. And should there be reasons to stage those loans into two or three, so significantly increase the credit risk default and so on and so forth, then probability of default loss given default parameters dictate the level of impairment requirements.

45:07 That remains true, of course, collateral to be factored in for Wholesale Banking business. That's the logic in one sentence. Thank you. And then actually one final question. Could you say a word or two on how diversified our fee and commission income business is as of today? Yes. I mean, we have different we have, for instance, partnerships from on consumer side. This is one big driver for us coming from our card business. Then we do have in Wholesale Banking Payment Solutions business, one driver where we are having payment service providers, electronic money institutions and other regulated entities bringing fee income. And then we also do have the entities we are serving on the divested services serviced entities. So those are quite three quite different fee income streams we are getting.

46:08 Thank you, Antti. That marks the end of our Q and A session. I'm just going to borrow this. And I would like to thank everyone who has participated today. I would like to remind of our upcoming events during the fall and that our next earnings call will take place on the November 12. For any other questions, we still have a few that hasn't been answered. We will reach feel free to reach out directly to IR. And for those of you who have sent the contact details, we will reach out to you. Thank you. Thank you. Thank Bye bye.