Norion Bank (Stockholm:NORION) Q3 2026 Earnings Call

0:00 Welcome to Norden Bank's Q3 report 2026. My name is Martin Åsman and I am the CEO and CEO Peter Olsson. We go to page 2, which is a summary of the report. These numbers we go through, we should remember that they are exclusive one-time costs. Transaction costs that we have had for 8 months in connection with the acquisition of Strand Kapitalförvaltning. If we start from the top left, you can see that we have a loan book that has risen to 56.9 billion SEK. It is an increase of 2.5 billion SEK compared to the previous quarter. It is an increase of 5% and Q3 2015 and Q3 2016 we increased the portfolio by 16%.

0:48 All segments contribute to the growth, which is very exciting. The QE ratio has risen to 28.9%. Exkluderar vi då strand och konsensus, kapitalförvaltningsdelen då, så uppgår KU-talet till 27,5 procent, vilket är en förbättring med 2,5 procentenheter jämfört med samma period förgående år. Rådshälsostatet uppgår till 520 miljoner. EPS landar på 2,22, det är en förbättring med 31 procent jämfört med samma period förgående år och en förbättring med 26% compared to the previous quarter. The return on capital increases to 16.7% and we also take into account the surplus liquidity. When we adjust for that, the return on equity increases to 17%. The same period the following year was the figure 15.4%.

1:46 Continuing on the capital relations, the total capital relation increases to 16.1% and the core premium to 13.1%. In the beginning of August, we announced that we will sell our entire MPL within the private sector. It is expected to close during the fourth quarter and after this transaction is completed, we have a plan to launch another resale program for SEK 500 million. Moving on to page 3, we look at Stock development, good growth, mainly due to the fact that it has two or three months this quarter in the summer period, so it's good.

2:31 All segments, as I said, contribute to growth. The stock is growing with 8 billion, or as I said, 16% from Q3 2025. If we look a little to the right, You can see some of the currency effects over the year, from the same period to now. Relatively small currency effects, so it is an organic growth in the bank. We go to page 4, we look at the business segment. Good activity and flow segment, up 150 million. All countries contribute. We also said, Peter and I, in connection with the Q3 report, that we had a whole lot of solutions at the beginning of Q3. We communicated in connection with Q3. We also had a whole lot of business that was solved right at the beginning, the first days of the third quarter.

3:26 But as I said, we are still increasing the stock as a whole lot of new business during the period and a lot of the majority of them New business came in at the end of Q3. It will be nice to come in a little closer in the future. The stock market is rising with almost 30% compared to Q3 2015. Besides that, no major changes, whether it's geographical split or different branches that we are active in. On the other hand, the duration in the stock market we have worked with for a while. There are no major changes compared to the previous two quarters. But if we look at it in the long term, if you look two years ago at the duration, 15 månader och nu är den uppe på 20 månader och det har vi jobbat ganska mycket för att både förbättra kvaliteten och för en lite längre duration i vårt kreditportfölj.

4:13 Så det fortsätter att gå rätt bra. Vi går till sida 5 och så tittar vi lite på fastigheter. Om man först recapar lite så sa vi det att det var egentligen Q2 och Q3 förra året som lite lugnare. Sen såg vi aktiviteten i de fastigheter började komma igång egentligen i mitten av Q4. Som sagt en annan efterfrågan på krediter. We can talk a bit about Basel IV implemented in 2025 has created a clearly better compliance ratio for us Under en längre period, och det ser vi även det här kvartalet, vi har kunnat bredda vårt erbjudande inom fastigheter. Vi har blivit relevanta för en klart större fondupp.

5:20 Vi har historiskt legat på marginaler på 5,5-6 %. Nu kan vi erbjuda en fastighetsfinansiering egentligen i alla nordiska länder på samma marginaler, men även lägre marginaler, men med bibehållen eller till och med bättre riskförsörjning. So that we can have a clear, broader outlook and become more relevant. And this will lead to an increased flow rate. It is a large customer group that we can reach. We get a better stability portfolio. This will lead to longer durations. Over time, lower credit losses. And then we will have fewer customers who come after us in their rent payments. And we also get lower volatility in the rental network. So this is positive in all ways.

6:09 Vi fortsätter lite med fastigheter och tittar på sidan 6. Här ser ni stockutvecklingen. Vi ökar stocken med 1,4 områder under kvartalet, drygt 10% med Q3 2025. Framförallt Sverige, det här kvartalet har varit en bra aktivitet. Återigen, det här är sommarmöven, vi har sett bra aktivitet inom alla delar, även fastigheter, trots att det är sommarperiod. Mycket kunddialoger, egentligen inom alla fastighetsrelaterade segment. It seems that there is a lot of capital on the sidelines that is expected to be subsidized, so a good demand. If we look at the competitive situation, it is roughly the same competitive situation as we saw during the previous quarter. Then we also do business for a longer period of time, lower LTVs. We are also actively working to extend the duration of the property portfolio in the same way as before within companies.

7:07 Bra aktivitet så här långt vi har sett in i Q4. Sen återstår att se hur det utvecklas resten av kvartalet. Sen kommer vi också att under slutet av det här året, början av nästa, att öka vår närvaroaktivitet även i Norge. Där tycker vi att det finns en bra potential framåt. Utöver det så finns det inte så mycket att säga gällande geografiska splitten eller olika branscher som vi är aktiva i. So we can conclude properties with page 7. We will continue to strengthen the share of seniors. You can see on the right side of page 7 that the senior share increases to 69 from 69 in the previous quarter.

7:55 The senior share, compared to a year ago, went from 63 to 69, and if we look three years back in time, we have gone from 58 to 69. So there is better and better quality and better stability, and the senior share continues to increase. Good improvement over time, and we are pleased with that. LTV is decreasing very slightly compared to the previous quarter, and the junior share is on an unchangeable level. We look at page 8. Here is a little recap of what we have said recently. Kvartalen. Privat fortsatt går väldigt bra. Vi har haft en positiv trend i åtminstone två år. Jag skulle säga två, två och ett halvt, tre år har vi haft en positiv trend där vi har ställt om kreditgivningen och sett resultat av det.

8:42 En fortsatt bra konkurrenssituation. Vi ökar stocken mellan Q2 och Q3 med 850 miljoner. Jämför vi privat det här kvartalet med samma period föregående år så ökar vi stocken med 15%. We have seen for a long time a clearly improved payment pattern i 2-3 år. Det fortsätter att förbättras ytterligare det här kvartalet.

9:27 Det är klart färre som får första påminnelsen och färre som går till inkasso, så det är väldigt positivt. Ja, när man tittar lite på så långt in i Q4, det har inte gått så lång tid, men det vi ser här i början, det har vi sett i oktober, så det är fortsatt en bra situation och fortsatt bra tillväxt, som sagt. Ganska kort i oktober, men det här har vi sett ser väldigt bra ut. Since 2009, we have been looking at Wall-E. This is another fantastic quarter for Wall-E. The volume of transactions during this quarter has increased, as you can see on the screen, to 6.6 billion. All time high again, even though this is only a Q2. Q4 is the strongest season for Wall-E, but we have an all time high of 6.6 billion in Q3. During the same period, we had volume of transactions We have 7.6 million active users.

10:49 1.4 million active customers in one year. It is still a very good development for Wall-E. Wall-E's checkout solution is now also available for retail in Germany and the Netherlands. As I said, good momentum in Wall-E, also this quarter. Then we have under Q4 something called CCD2, which is EUs reviderade konsumentkreditdirektiv. Det kommer implementeras. Det gäller alla handlare. Det är som sagt den 20 november, tredje dag i kraft. Det återstår att se lite hur det här kommer påverka branschen som helhet och våra handlare. Vi tar sidan tio och så tittar vi på det som vi nu Consensus and Strand.

11:42 You who are with me know that I have interviewed Consensus in Banken under Krutvården last quarter. The interview of Strand we are doing now. It goes according to plan. I think there are also very good Synergieffekter mellan konsensus och strand framåt. AOM sen uppe till höger, det uppgår till 16 miljarder. Ökning med en miljard jämfört med samma period föregående år. Resultatmässigt ganska plus minus noll, så det finns en viss förbättring av det här när man jämför med samma period föregående år. Vi ser också om affären till mer repetitiva intäkter framåt här.

12:31 and we have the intention to continue to grow this area. And in connection with the fourth quarter we will have a part of the conversion costs within wealth management. With that I hand over to our CEO Peter and page 11.

12:47 Thank you for that. We start by looking at the revenue development. Strong development here during the third quarter. We have total revenues That's worth mentioning on the revenue side during this quarter. You heard Martin say earlier that we have closed the acquisition of Strand under Q3. And Strand is consolidated in our books from mid-August. In total, on the revenue side, we can say that Wealth Management includes a total of 19 million SEK in this revenue pool. In addition to that, what is very positive, you heard earlier that we have received some retroactive interest rates that we have booked during this quarter.

13:42 The figure goes to about 30 million in these interest rates. This also contributes to the fact that we have a strong development of the NIM. and it goes up to 6.6%. Despite the fact that we have had a volume development where growth has come in late this quarter. We grow from the loan book with 2.5 billion under this quarter and of the 2.5 billion, roughly 2 billion have come in during the month of September. Goal 12. You heard these 30 million in so-called retroactive interest income. It is still a negative effect for us in terms of bookkeeping. From this conservative way we have cash accounting principles that we have to handle the customers who have challenges with paying their rents. If the entire portfolio had been full payment, We have seen a negative effect on about 30 points, but it is also exciting to see that it has decreased significantly from the top levels as you can see on the graph below.

15:01 We have gone to page 13. We are in an interesting phase in the cycle here with a lot of interest rates and volatility on the interest market. ECB has made increases under both Q2 and Q3, which has affected us. And if the forecasts are correct and the expectations are true, then we are in a very good position. This means that the cost per funding krona for us has increased. On the other hand, you can see on the bottom line of this graph that our funding costs in relation to the stock is flat or even slightly down below Q3.

16:18 Banken på ett väldigt framgångsrikt sätt. Ni har hört oss prata tidigare om att vi opererat med en ganska kraftig nivå av extra överskottslikviditet, inte då minst för att hantera migreringen av volymer bort från Avanza, sin låningsplattform, som vi genomförde här tidigare under 2026. Det här ligger bakom oss och det har möjliggjort för oss att vi har lyckats kalibrera det här och har en bra utveckling på våra räntekostnader. The interest rates are on the way up, but as you have seen earlier and heard us mention, we have an underlying positive interest rate in the bank as well. We go to page 14, look a little at the different segments, starting with the business segment. And it is a very good activity.

17:12 Here is perhaps the most obvious proof of this, when we talked about back heavy volumes, and you heard Martin talk about that Q3 started to go down, exactly according to the expectations we had and what we have flagged for. So the increase of the stock, the compensation and the net increase will come during September. So again, timing effects that affect the NIM. The NIM at 5.9% is not a decline. If we do these timing adjustments for the NIM, we see an unchanged or even slightly increasing level. We go on to the 15th segment, the property segment.

17:58 Again, a good volume increase, good activity, especially for being a Q3, where a large part is summer period. Here you see the effect where we have gained these 30 million in extra income during the quarter, and that is why you see that NIM The long-term trend remains. You see that the NIM is gradually a little lower in the property segment. This is due to the fact that we are consciously doing business with somewhat lower margins, but also lower capital binding.

18:44 We can apply through the new Boston 4 Regulatory Board We go to page 16, the private segment. No, but again, it's going very, very well. Volume-wise, up about 850 million. A few things worth pointing out here. If you look at the margins, you can see that it is strengthened to 8.0% in Q2. This, which I have talked about earlier, is driven by a...

19:37 Even though it has been lower here now under 2020, It means that you see a trend that is similar to the one we talked about on the property side. And this is also a conscious choice where we gradually seek lower risk. We achieve better credit quality. This comes, of course, with a slightly lower price range. We go to page 17, talking about Wally. This is clearly a very good quarter where the volume of transactions is up about 30%.

20:39 You can see on the graph on the right side here that the revenues of 171 million are also almost 30%. And even the stock is increasing, but with a a little lower percentage and that's exactly how it should look. This is the least capital intensive of our segment. And you also see that the nimble gradually strengthens. And this is also completely in line with the expectation. It does not mean that we take better paid by our customers, but you who have followed us have noted that Volley has had very good momentum for a long time now. We have taken in many new traders and this is an effect of that these new collaborations and the stocks that are there reach a higher maturity rate. So this is the result of the work that we have done over the last few years. We have a good and strong total income margin, just over 18%.

21:45 So this is in combination with a fairly low capital bond. We go to page 18 and look at the costs. They go up to 301 million under Q3 and we have adjusted for the 8 million in transaction related costs as Martin mentioned earlier. We have seasonally low costs in Q3. We talked about wealth earlier on the income side.

22:38 Wealth is included in this cost mass of about 19 million. That means that if we had adjusted them, the cost would have gone up to 282 million, which will be compared with the costs in the graph in Q2 2025, which has peaked to 275 million. We have a QE rate of 28.9%. This is an improvement, despite the fact that we have included Wealth Management in the books now under 2026. We go to page 19. To give you the full picture on the cost side, if you look at the report here, you see that the reported costs go up to 309 million. We talked earlier about that we have Transaction related costs for the beach acquisition, which is about 8 million, so it is just within the interval that we are flagged for here in connection with the Q2, we said that we expected somewhere between 5 and 10 million just within the interval that we ended up in. So if we subtract the 8, we end up at 301 million and a QE ratio of 28.9%.

23:52 And again, we have 19 million in costs for wealth, and that's how we end up at 282 million. So on a comparable basis, that would have increased by 27.5%, which is an improvement of 2.5% compared to the previous year, and the cost mass at 282 million. We continue to gradually increase over the night. You have heard us talk here within parts of our business, where we are actively looking for a lower risk profile in the withdrawal and we are also happy that it is starting to be visible in the figures.

25:08 Despite this, we are reserving what we think is conservative. There is still a certain insecurity regarding the macroeconomic situation and insecurity when it comes to the rate path forward and interest rates that are pointing upwards. An example that we usually talk about is the survey requirement. It is three private, with an increase of 60.7%. This is an increase of about 20 points compared to Q2. And also from a longer perspective, we have strengthened this a lot. In two years, we have increased it by 5.5%. We, since 2021, summed it up. A strong income development, a good cost side, We have a adjusted turnover that goes up to 520 million and it is an increase of 20% compared to the corresponding period last year. If we look at the profit per share, it increases by 31% and here we clearly see the effect of the repurchase of our own shares.

26:28 Sida 22. Och pratar om avkastning på eget kapital. Vi har en avkastning i den här Q3 som är på 16,7%. Ni ser till höger att justera även bort överskottskapitalet som har funnits då relativt Our financial goal, if capital buffers, is to raise the adjusted ROI to 17.0% here now under Q3. So a very strong and good drop-off level, which then exceeds our financial goal to drop 15% or better. Page 23, capital coverage.

27:23 We have, as I said, a growth in the loan book of about 2.5 billion SEK during this quarter. We have good results, but that means that we are reducing the capital burden a little, but it is still at very, very strong levels. The current primary capital at 13.1 and total capital burden 16.1. Compared to the requirements we have, that means that we are right in the middle Q3. We go to the year 2024 and Martin mentioned this earlier that at the beginning of August we sent a very positive press release and that is that we have signed an agreement on a sale of the absolute majority of our NPL portfolio to private individuals and this is segmentally private segment and payments that will be affected by this.

28:35 The portfolio amounts to a total of 6.2 billion SEK. For this we get a price drop of 2.6 billion SEK and this will be compared with the usual value of about 2.5 billion SEK on the current portfolio. For various technical reasons, we do not expect any material results. capital. There are a number of positive things with this deal. We expect to earn from this capital, expected to be strengthened with about 150 points. And this means a capital release of about 900 million when the transaction closes.

29:25 In addition, these loans that are included in the portfolio are When we sell the portfolio, it means that we do not have to make future withdrawals of about SEK 700 million over the next three years. To sum up the transaction, it gives a significant positive effect on the capital side. We go to page 25 and as you have heard me say earlier, we are here at the start of Q3, right in the middle of the capital coverage on the financial goals that we have. However, when the sale of the NPV portfolio closes, there will be a clear surplus capitalization in the bank. and we have previously worked with a resale program and the intention from our side is to launch a new resale program of 500 million kronor as little as possible after the sale of the NPP portfolio has been completed.

30:58 Last year we held an extra company vote and it was actually an event on the agenda and it was that FI must formally give permission to both withdraw the shares and give permission to With that, we move on to page 26, Martin.

31:45 Excellent, thanks for that, Petter. Let's sum up the quarter. Good growth in all parts. Again, as I said, a big part of Q3 summer. We have seen a good growth, and we have done so all year round, so we are very happy. The ETS growth continues to improve, both compared to previous quarters and over time. As I said, we have talked about the costs. We have seen an investment pace here that we believe will plan out a little forward. We saw the top here in Q4 that we started to see a tendency to see that the costs do not increase in the same pace. And yet we have had a very good increase in our credit stocks. If you look at them later, In different segments, the private sector continues to do very well.

32:37 We have this credit transfer and credit transfer that we have done for several years, we have started to see. It is a back and forth situation. It continues to look good and we are developing better and better risk classes. We also put a lot of focus on short here and have a plan for that also in the future. If we look at companies, again a good quarter. We saw very large solutions in the beginning of Q3. and many of our partners came in at the end. But a big demand, a very good activity. And it's the same thing at Fastjetter, where we have a completely different opportunity to expand our offer forward. And also very happy that a part of our customers came in contact with their rent payments. And we see a continued interest and many customer dialogues within Fastjetter as a company.

33:33 Wall-E is still very good. We have seen that the volume of transactions has increased for quite some time. As Peter said, it takes some time before the customers see the effects and the result from these volume of transactions. But we have seen that for a while now, so it is a very strong position for Wall-E. Consensus and Strand, as I said, we have integrated consensus. Strand is integrating alcohol into the plan and we believe that management over time can Thank you for your time and opening up for questions. Thank you. Under frågestunden kan deltagarna ställa frågor genom att trycka fyrkant 5 på sin telefon.

34:38 Om du vill dra tillbaka din fråga, vänligen tryck fyrkant 6. Nästa fråga kommer ifrån Emil Jonsson från DNB Carnegie. Varsågod.

34:50 Tack så mycket. God morgon. Tjena. Välkommen. Tack. Långräntorna har stigit en del. De är upp. 50 points since last summer. Can you say something about how that affects your chances of reaching the goal with the solution plans on the Stage 3 loan?

35:09 What did you say? I had the long range up a little bit. To reach the goal with?

35:14 With the solution plans on the Stage 3 loan.

35:18 Aha. To start with, if you take away the currency effect on the Stage 2 and Stage 3, we are down about 100 million. Okay.

35:58 You may have already mentioned it, but what was the reason that the interest margin in Consumer came down about 80 points from the level in Q2?

36:10 Peter, can you tell us the difference between Q2 and Q3?

36:17 Q2 has a positive impact from the season effect that we typically have had in Q2. It was a little smaller in Q2 2026 compared to previous years, but it was still positive. If you had cleaned it up, the number would have been somewhere around 7.5 in Q2. We are actively looking for a different risk profile in the loans that we do, also on the private side. We see that it will come with a better risk profile and lower carbon losses. It is a conscious shift from our side.

36:57 As I said, Q2 is a tax return. No, but as Peter said, we do better and better quality. This is not a competition situation that has worsened. The competition situation is the same, but we are looking for even better quality. And we have seen credit losses over time and we continue to see that in the future. If you look at the payment pattern, we see that there are a lot fewer customers than from the first reminder and a lot less people. Thank you for the explanation. One last question. If I'm not mistaken, you mentioned that there will be restructuring costs in Q4.

37:35 Can you say something about Yeah, absolutely. Good question.

37:59 I suspected you would take that one, Emil. It's hard to say when in time. We think it can be in Q4, but it can be a part of Q4, it can be a part of Q1. It's hard to say exactly when in time, that's one thing, without being too fluffy. Two, in the range of 15 to 25, I would say. Next question is from Björn Olsson from SEB.

38:53 Hi, just to follow up, if we start with the marginals, as you say, that you are heading towards a lower risk segment, what is the new front book marginals within both the respective real estate segments, and where will they land when it comes to the new demand for this economy level?

39:18 That's a great question. It depends on what kind of mix we will have in different businesses, what kind of capital bond we have and where we get through, how the competition situation in different subgroups and risk segments will develop forward. There is probably no simple answer to that question other than that As Martin mentioned earlier, historically we did business that had a margin of around 550-600 points and now we can get through and do business on 450 points also to complete this. At the same time, we should also remember that it reported the NIM within the property segment.

40:06 Yes, but it also has a clear drag on it due to the cash accounting principle that we add and much more. I wish I had a straight answer, but there are too many uncertainty factors to give the straight answer, actually.

40:22 Yeah, that's a good question, but it's not that easy to answer. That's what you could say.

40:30 We can think that it continues to be a little, mixed, given the appetite you have, so it should continue to be a little lower.

40:38 It will continue to be lower according to the trend that we have seen here over the past year, during the nearest quarter, so our understanding is that it will continue to trend in that direction, yes.

40:51 But you probably won't see the same angle or slope downwards as we have seen historically. It's probably a bit down or a bit flat. That's the best estimate. Then you can go into each segment and talk about it. But if you talk in general, I would say so. I hope there was some answer to the question,

41:12 Björn. Yes, absolutely. And it reminds us, as you are also aware, if we go into a rate increase cycle, How will the effect be on the marginals? What is the lag that you can put over the entire funding cost of the customer?

41:29 To start with, we benefit from the fact that the interest rates go up.

41:34 The dynamic is that our entire company and property side is IBOR-connected, so we will move forward with higher market interest rates automatically, and we have been working with three-month connections in general. foreign foreign foreign There we are like other banks so to speak.

42:49 Yes, clearly. It's probably me who heard it wrong, but help me then in my confusion. I experienced that you said that you had 19 million in revenue and about 19 million in costs in the total. That's right. So it's actually a break-even of all the acquisition costs and so on.

43:14 The compensation costs are taken up in the bank for us who bought it, so down in the operational part we have plus or minus some results here under Q3.

43:23 If you compare it with one year ago, then you don't own them, but if you compare it with those two years ago, then it was a couple of million out, so the trend is going in the right direction, even if it's 19 flat on the lower street.

43:43 Alright, Janne, I was wondering if you could look at other acquisitions to build more scale in that business, or is it just organic OEM growth that you plan to drive profitability upwards in the segment?

43:59 Yeah, no, but it can, it's still a combo. I think, number one, we have just, Consensus is just integrated in Q2, and Strand is working in Q3, Q4, so you should probably let them, like, set up a scale distribution and so on. But it's clear that We think it was a good acquisition for the shareholders. We think it's a good new segment. We think what we bought was good for the shareholders. So we find something that fits there for a good amount of money. And we think there is a possibility that it will be better in the whole. Of course, we are interested in something else. So it's a combo, acquisition and organic. Maybe not right now, because now you have to let it be integrated and take out share shares. But of course, we... Den här delen, den ska inte vara på 16 miljarder om tre år.

44:46 Det här måste ju upp i volym och det måste ju upp i intjäning, för det här ska gynna bankens totala lönsamhet. Det ska kunna synas som ett ägg i cement som faktiskt har ett resultat som är positivt för helheten. Och det måste man ju upp i. Det är bland annat AUM. Så att, ja. Vi bygger inte det för att det ska vara 15-16 miljarder på tre års sikt, så kan man säga. Sen hur vi gör det, det är vi öppna för i olika... There are no more questions at the moment, so I leave the floor to the speakers for any final comments. Thank you all, I wish Peter and I a good day, thank you, bye.