SEB — Call Transcript 2025

Today, and thank you for standing by. Welcome to the SEB Financial Results Q3 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Johan Torgeby, CEO. Please go ahead. Good morning, and I'd like to extend a warm welcome to all of you today for SEB's Q3 financial results. Going to our first page with highlights, we today post a solid financial result in a quarter which is seasonally slower, but we've also experienced less volatile and stable financial markets. Noteworthy is that investment banking activity has held up and showed resilience, and we saw an increase in capital markets activity to the later half of the quarter. Customer satisfaction and employee engagement continue to show relative strength, and it has been decided to continue the $2.5 billion share buyback program per quarter by the board as we announced today. Flipping to the next page, we have some recent events, and the first one is the infrastructure of payments, which is now being disrupted to some degree by new technology coming from blockchain. We have, together with eight other European banks, launched a consortium with an initiative to see if we can launch a euro-denominated stablecoin on the chain, targeting the first half of 2027. Also, AirPlus has now been used as the new brand for our previous Eurocard, and this is an example of the marketing campaign, particularly towards the Scandinavian countries where Eurocard has been a long prevailing brand within the corporate card segment. It has now been rebranded under the headline "Green is the New Gold," and if you haven't already, you will soon get an AirPlus instead of your Eurocard in the color scheme represented here on the slide. Turning to page four, we have, over the last couple of quarters, updated you on our progress within AI. We have shown you the internal projects that we're running, about 130, which is funneling in in different categories of areas we think we can improve, but also gone through the recent investment that we've done together with a consortium to get compute capabilities available to us. Today, I'd like to introduce the third corner of this triangle, which is actually SEB not only working with offering better products, integrating it in the products, not only running the bank using AI, but actually enabling banking in the AI community, which is the core business we do. We speak a lot about different business units in the bank, but this is probably one of the lesser-known ones. In 2022, we created a business unit called SEB Growth, where we now have an offering tailored for fast-growing companies with high innovative content and companies that plan to raise capital and/or list or sell themselves in the future. This is an attempt to combine corporate banking with investment banking with private banking for those entrepreneurs and these fairly young companies as they begin their journey. We've also included a few of the logos which we have recently supported, such as Lovable, Sauna, Modal, and Legora. All these are well-known fast-growing companies in the AI space in Scandinavia. The next page, we can then look at the development of our credit and lending portfolio. As all of you are aware, we've had a little bit of a sideline movement in recent years. However, both last quarter and this quarter, we have some growth, albeit modest. Lending year-on-year for the corporate book is up 4% FX-adjusted, and the total lending portfolio is up 3% FX-adjusted, with households and Swedish mortgages just shy with half of that growth in the third quarter this year. Looking on the next page on the JAWS slide, we can see that the costs, the trajectory of costs is tailing off, and we are roughly back to trend that we had prior to the elevated profits generated by the interest increase, with a CAGR here represented from the time 2016 to 2021. With that, I'd like to end this part and hand over to the CFO, Christopher Malmer. Thank you, Johan. I would now like to turn to financials on the next slide. Operating income for the third quarter declined from the previous quarter, reflecting typical seasonal patterns, notably within net fee and commission income, where the second quarter performance was particularly strong. Net financial income was impacted by market valuations of our strategic holdings during the quarter, which had a positive contribution in the second quarter. This valuation effect accounts for around SEK 500 million of the delta in net financial income between the quarters. Net interest income increased slightly despite continuously downward-trending interest rates, explained in part by the higher day count in the quarter, some positive effects from FX, slightly lower deposit insurance guarantee fee, and a lower short-term funding cost. Operating expenses declined slightly from the previous quarter, also following the usual seasonality. As the Swedish krona has continued to strengthen in the quarter, we are providing an updated FX-adjusted cost target for the full year of SEK 32.6 billion, compared to the original cost target of SEK 33 billion. We maintain our range of plus minus SEK 300 million around the cost target level, which is primarily related to the ongoing integration of AirPlus. Here, we see some potential scope for possibly accelerating that implementation program a little bit further. As mentioned at the start of this year and reiterated also here in the second quarter, we're now in a phase of consolidating our recent years of investment, which is resulting in a lower cost growth. We also maintain our external hiring pools for non-business-critical positions to facilitate this consolidation and to make room for continued investments in selected areas, notably within technology and AI. The full-year cost target does imply that there are some effects to expect in the final quarter of the year. Net expected credit losses of around SEK 200 million or 3 basis points reflect an underlying stable asset quality, as also reflected in the continuous decline of stage 3 assets. We added around SEK 100 million to the portfolio overlays in the quarter, and we also had some sizable reversals. Imposed levies came down in the quarter as expected, reflecting the development of our Baltic levies, and our full-year guidance for imposed levies now, also including Riksbank's introduction of the interest-free deposit, now amounts to SEK 3.6 billion. That's up from the SEK 3.5 billion communicated in the second quarter. Tax rate of 21% in line with guidance, net profit for the quarter of SEK 7.7 billion, and the return on equity at 14%. We ended the quarter with a CET1 ratio of 18.2%. On the next slide, we turn to the development of the net interest income. On a divisional basis, the NII in Corporate and Investment Banking declined by around SEK 200 million, primarily reflecting a lower net interest income within Investor Services, which was elevated during the second quarter, and that was the dividend season, as we mentioned at the time. NII also within our Markets business was a little bit lower as customer activity came down for the season. From a volume perspective, lending within CIB declined in the quarter as some of the event-driven financing volumes generated earlier in the year rolled off, and that together with FX effects explained the majority of the move in the loan book compared to the second quarter. Year-on-year, lending to corporates within CIB increased by 3% on an FX-adjusted basis. Within Business and Retail Banking, NII declined by around SEK 100 million compared to the previous quarter, and that's primarily reflecting the impact from lower interest rates on deposit margins. Lending volumes were largely unchanged in the quarter, and following two strong quarters of market share gains in the Swedish mortgage market, Q3 volumes grew a little bit less than the market. Year to date, our net sales of mortgages represent a market share of around 13%, which is in line with our share of the stock. Competition in the market remains firm, and mortgage margins moved largely sideways in the quarter, remaining at historically low levels. Within our Baltic banks, net interest income was largely unchanged as the impact from lower interest rates was partly offset by higher lending and deposit volumes across both private and corporate customers. Loan growth in the Baltics remained robust, with mortgage growth around 9% and corporate loan growth at around 8% compared to last year. Within Treasury, NII was positively impacted by the yield curve as well as favorable funding conditions within short-term funding. Looking forward, we continue to expect our net interest income to bottom out some three to six months after the latest or the last rate cut. Bear in mind that is based on how our balance sheet looks today, so volume growth and any proactive repricing could impact those dynamics. We turn to the next slide, and we look at the fee and commission income in the quarter. Total fees and commissions declined by around SEK 400 million compared to the previous quarter, and if we look on a divisional basis, we effectively see three developments behind this. Firstly, within Corporate and Investment Banking, fees are seasonally softer in Q3 across most capital markets-related businesses, including issuance of securities and advisory, which was also particularly strong in the second quarter. This is also true for lending fees, and combined, these effects accounted for around SEK 400 million in CIB. Nonetheless, CIB generated the highest net commission income on record for a third quarter. The second factor related to card and payment fees within Business and Retail Banking, and again, seasonal patterns impacting the activity levels primarily within corporate cards and AirPlus, and this affects around SEK 100 million compared to the previous quarter. Thirdly, going in the other direction, we saw about SEK 100 million increase in fees and commissions in Wealth and Asset Management as a result of higher assets under management and continued business momentum. Net new money across the group amounted to SEK 8 billion in the quarter. On fees and commissions, when we closed the second quarter, we referred to a more constructive fee environment, and while Q3 will see or should see some usual seasonal patterns, which we've seen, we said that if the market backdrop doesn't change dramatically, Q4 should see a continuation of this more constructive trend. This comment, we think, remains valid, which is encouraging going into the last quarter of the year. If we turn to the next slide, we set out the development of net financial income this quarter. NFI from the divisions was largely unchanged from the previous quarter at SEK 1.9 billion. The decline in the headline NFI versus the previous quarter is, as I mentioned, largely explained by valuation effects related to our strategic holdings, and that's primarily in Euroclear, which also paid a dividend during the second quarter affecting that comparability. These effects were partly offset by XVA going the other way, and we continue to look at the long-term average of around SEK 2.5 billion per quarter. Turning to the next slide, we'll look at the development of the CET1 ratio in the quarter. We closed the second quarter with a management buffer at 290 basis points. During the quarter, from left to right, as usual, we received an updated SREP update from our supervisor, and as you will have seen in our separate disclosure on that topic, this resulted in a lower Pillar 2 requirement related to lower capital impact from IRRBB interest rate risk in the banking book. We add 41 basis points reflecting the net profit in the quarter after deducting our dividend accrual while lower risk RIA contributes about 14 basis points reflecting positive risk migration in the book during the quarter. Under RIA other, you will find a combination of other developments on the balance sheet, the FX effect, the overall RIA size, market risk RIA, and also a positive impact from us applying the SME factor to some of our CRE exposures. These factors in total added 22 basis points and were largely evenly distributed between them. Finally, the decline of 18 basis points reflects the phasing in of the RIA increase in the Baltic banks that we announced in the second quarter, and that is related to the ongoing work with our Baltic IRB models. This takes the CET1 buffer to 360 basis points at the end of September, and we also highlight that the remaining impact from the Baltic RIA increase is around 70 basis points, in line with the communication at the time of the second quarter, and we expect to phase this in over the coming three quarters. That means that our buffers, in effect, on a pro forma basis stand at 290 basis points with the Baltic RIA fully phased in. Other effects to bear in mind as we go into the end of the year is the impact from operational risk RIA in the fourth quarter when we do review that level. On the next slide, we summarize our capital and liquidity position at the end of the third quarter. Our capital as well as our liquidity measures have all strengthened during the quarter, reflected in a rising LCR from 130 to 136% and a higher NSFR from 112 to 116, and the CET1 ratio as we just discussed on the previous slide. Finally, I would like to conclude with our financial targets, which remain unchanged, including a 50% payout ratio, a management capital buffer target of 100 to 300 basis points above the regulatory minimum, and a return on equity competitive with peers with a long-term aspiration of 15%. Return on equity year to date stands at 14.1%. With that, I hand the word back to you, Johan. Thank you, Christopher. That ends our prepared remarks, and I'll hand over to you, operator, for the Q&A. Thank you. Thank you. As a reminder, to ask a question, please press 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1 1 again. Please stand by while we compile the Q&A process. We will now take the first question from the line of Namita Samtani from Barclays. Please go ahead. Morning, and thanks for taking my questions. My first question, what should we think of funding costs related to net interest income going forward? Because surely if rates are still coming down or they have come down, which is yet to be factored into our net interest income, this will continue to be a tailwind. Secondly, I just wonder, do you lend to private credit, and what percentage of that is part of your book? Thank you. Good morning, Namita. Thanks for your question, Christopher. I'll take your first question on the net interest income. You're right to say that we've had a positive effect from funding costs in the quarter, and you saw that also in the breakdown of the NII in Treasury. We estimate that effect to be positive for the quarter of around $100 million or so. Now, going forward, we'll continue to reiterate the message on three to six months lag from the last rate cut for the dynamics to work their way through the balance sheet before the net interest income would trough. We should expect the net interest income to come down again in the fourth quarter and then in the first quarter, and then we'll see again what happens to rates, of course, as we go into 2026. Those are broadly the effects that I would bear in mind. Johan, you want to comment on the private credit? Thank you, Namita. We have no meaningful, noticeable exposure direct to any private credit. We do have a very, very small group of private equity firms that also have a private debt arm, but no direct exposure. It is so small that it's not really noticeable. Thank you. Thank you. We will now take the next question from the line of Magnus Andersson from ABG Sundal Collier. Please go ahead. Yes, good morning. Two questions, please. First of all, on corporate lending. Last quarter, you said you had an elevated level of activity-based lending, and it comes down a bit now quarter on quarter, FX-adjusted. Could you please tell us how you see the outlook for activity-based lending as transaction activities are now picking up now, and also what you think about the more lending for general purposes when you think that will pick up? That's the first question. Secondly, on capital and risk-weighted assets, the level was significantly lower than at least I thought in this quarter, and I see that your risk rate comes down in corporate IRB, for example. With the exception of the OPRES coming in into Q4, is there anything else here that could be volatile, or is this a reasonable run rate to use? I think you even included 10 billion of the Article 3 announcement as well here. Related to capital, do you know already now if you will continue with the share buyback approval for the full year in the Q4 2025 report, or if you would consider doing it as you did previously with the half-year approvals? Thanks. Thanks, Magnus. I'll start with the corporate lending. First, just note that you did accurately depict what we said and what happened last quarter. Those temporary elevated levels for transaction-based exposures have now fallen off. This quarter, with its 4% year-on-year, does not have those called temporary bridges on as there were very little transactions done into the summer. This is a much more steady as we go. When it looks going forward, the pipeline looks unusually strong. That doesn't mean that they naturally materialize for events and the event-driven lending that might come with it. We did see a pickup in investment banking and also capital markets transactions towards the later half of the third quarter, which is an encouraging sign. We, of course, always keep a close look as a leading indicator of what Americans do. You could see some similar signs or even more pronounced there. I also want to say that the lending fees this quarter, even though it's a very, very quiet one, is still 24% up year to date. The lending fees, which is, of course, what you typically the majority of what you earn on these is not NII when it comes to transaction, is up 9% the first three quarters this year compared to last. There is some underlying event-driven momentum, but I still want to be cautious because a lot of things need to happen, and we don't want any of the risks that have been identified to materialize in Q3 that would create volatility. If I'm a little bit constructive and hopeful, I think general corporate purposes, that's a longer transition. We are not seeing this broad-based let's invest in increased capacity. You need to borrow to invest further because the first investments, they're always done with your operational capital or cash at hand to meet the demand. In my mind, I often come back in this discussion around the lack of demand in the economy, retail sales, and consumption in GDP. That's kind of the last leg that we are looking for really to change the picture. Of course, looking at the economists, they are looking pretty constructive for 2026 and 2027 on this topic, but let's wait and see. Malmer? Thank you. Magnus, on the RWA, if we look into the fourth quarter, you're right that we expect the OPRES effect. We estimate that to around 15 basis points negative impact. The other moving parts that are subject to movements during any quarter is the FX effect, of course. You see that it's positive in the quarter. That remains, of course, unknown. It's the RWA size, which in this quarter is, again, positive contribution. Coming to your previous question, I hope that we will see that moving in the other direction. The third one is RWA asset quality, which again in this quarter due to upgrades of risk classes of a number of counterparts also contributed positively. These are the moving parts, and then you got the OPRES RWA. When it comes to the buffer, the 360 basis points, and we look at the pro forma effectively the 290, assuming the remaining phasing of the Baltic RWA. Last year, at this point, we were around 470 basis points. The situation was very different, but still there are, to your question, a number of moving parts in the area that will play out in the fourth quarter. I will come back at that time with comments on future buybacks. Okay. Thank you. Thank you. We will now take the next question from the line of Markus Sandgren from Kepler Cheuvreux. Please go ahead. Good morning. I was thinking about there is some growth in the Baltic lending business. I was thinking your ambitions going forward, do you expect to grow in line with the market given your size, or is there any reason to believe that you can capture more market shares there? Okay. Yes, we are growing clearly higher, and it's not only this quarter. It's been going on for a while, so we are actually accelerating a bit. We're now looking at 8% to 9% growth in this quarter year-on-year compared to, if I remember correctly, it was about 6% last quarter. We are maintaining our market share as well. The long-term picture is that it's quite concentrated, as you probably know, to two large institutions, Swedish banks in the Baltics. There has been, of course, increased demand for higher competition from everyone in the marketplace. Right now, we have an ambition to maintain this position. I wouldn't commit as it is a very high market share we start with. This is a little bit defend and protect, but we are not going to give it up easily. Be careful in increasing market share, but definitely, it's a fast-growing market. I also like to point out that it is a higher inflationary market. In real terms, it is not as impressive as these headline numbers are, and you need to also take that into account because the loan book, unless you re-lever the economy, will grow with nominal inflation plus whatever you do. Okay. Thanks. Thank you. We will now take the next question from the line of Martin Eksted from Handelsbanken. Please go ahead. Thank you. Can you hear me? I hear you well. Excellent. Thank you. I wanted to focus a bit on your retail business. Looking at Statistics Sweden data on mortgage lending, during the first half of 2025, you saw quite strong market shares of net new lending. I think you took like 16% on the new lending against the backbook market share of 13%. As we entered the second half of the year, this trend kind of evaporated, and you took just 1% in July and 3% in August, despite similar volumes in the market overall. Is there a story behind this that you could share with us perhaps? Secondly, on that same topic, with Sven Eggefalk now joining you as a new Head of the Business Line, should we keep hopes up for higher volumes of market shares to return? Good morning, Christopher. I can comment on this. I think, as I mentioned in the remarks, if we look at our market share year to date in net sales of mortgages, that stands around 13%, and that is in line with our historical stock level. There is, as you point to, some movement between the quarters. I think when I look at the focus that we have for winning the mortgage market share business, we think of three components. It's the speed, it's the availability, and it's the pricing. It's about us continuously evaluating and making sure that we are competitive along all those three. As you will see, we haven't moved pricing much in the last quarter, but we're continuously working around speed and availability. I would also mention that there is a volume effect into this as well. Volumes are still relatively small, which can impact movements in between individual quarters. Year to date, broadly in line with the stock market share. Okay. Understood. A second question, if I may. Just picking up on Namita's earlier question on private credit, I wanted to pose this question to you a bit more broadly. The main focus around the private credit discussion has been centered on the U.S., right? You said you don't do this yourselves currently to any large extent. Generally, you stand perhaps as the leading Swedish lender to non-bank financial institutions. I just wanted to check with you for a Swedish take on this. How widespread is this concept in Sweden? What are your views on the viability of the model in Sweden? Also, a bit on the risks, perhaps. If you don't do this, who should be doing it, or shouldn't we be doing it at all in Sweden, and why not? Okay. This is a little bit of reasoning. Don't take this as facts. First of all, this has been a development very much driven by the U.S. I hear numbers like $2,000 billion U.S. dollars. It's actually surpassing bank lending if you extrapolate the current trends. It is a very, very significant deep source of debt capital for the American economy. Europe is much, much smaller as a whole. Even the things that are growing fast in Europe are typically more American firms replicating what they've done in the U.S. rather than European firms. You go to the Nordics, it's even more pronounced. Private debt is not a large funding source for the Nordics where we operate. This is, of course, very much if you look at the classic private debt, private equity firms of Scandinavia, which is our home market, that it looks very, very different in terms of the balance between equities, infrastructure, alternatives versus private debt lending. My take on this is that first, the leverage buyout market is very well functioning in Nordics. This means that there's much less of a free lunch to be had sourcing the money that you then refund and redeploy into a leverage buyout type of financing because this is almost like a game between the two different products. They are slightly different, but they achieve the same thing for a private equity firm. One is you borrow from a private debt with typically 7% to 9% yield expectations, or you borrow from a bank, which in the Nordics, we're very efficient, and we've been able to price the LBOs quite differently. If you look at the overall market of LBOs, how they're financed, it's clearly in favor of private debt funds. From the banking system, as far as I know, Nordic has very little exposure in the Nordic banks to this. It's other capital providers that have put the money in. Okay. Great answer. Thank you. Thank you. We will now take the next question from the line of Sreja Stava from Citi. Please go ahead. Hi, and thank you for taking my questions. My first one is your comments around the pickup towards the end of the quarter in capital markets activity. This quarter was affected somewhat by lower episodic transactions than you'd expect. I just want to talk about what the pipeline looks like for the fourth quarter, what you've already seen in the fourth quarter, and going forward, please. My second question is going back to your comments on the scope for accelerating the implementation of AirPlus. You've previously, if I'm not mistaken, commented qualitatively about when you expect it to be accretive, excluding, and including restructuring costs. Is there anything further you can now provide on that, given you've obviously had an extra quarter seeing the business and integrating it? Thanks. Sure. I'll start with the pickup. The circumstances around capital markets and primary deals and M&A and IPOs, it's very, I would argue, benign. It's a good market. Markets are strong. They're not over. You know, they might be an all-time high on the stock market, all-time tights on credit markets, recent tights in credit markets, lower interest rates, and a little bit of European spurring optimism for what is going to come. It's not particularly strong here and now, but it's definitely more optimism around where Europe could go, not at least in Scandinavia and the Baltics if you look at GDP projection, consumption, etc. I would argue that Germany has had the biggest delta from one year ago where they were very much not in favor. Now it's a little bit of, let's say, interest at least on what could Germany do with all these announcements around fiscal stimulus, defense security, and resilience. The uptick is exactly what we would have expected. We've actually been a little bit disappointed, I would say, if you compare a year and a half ago when we saw that the interest rate has peaked and we had a very quiet couple of years behind us after the record years of the early 2000s and 2020s. Now it looks quite constructive. You saw that before summer, we did an unusually amount of large deals in the Nordics. Of course, summer dies. I would say that the pipeline and the amount of discussions for the fall and next year still indicates that there is a higher level of potential than there was before. Do not take that too much, but I'll just look at issuance of securities and secondary market derivatives, which is, of course, it's cutting in the financial result today. We're up 29% year to date compared to last year on issuance and securities and services, M&A and equities. We have 14% in secondary markets year to date. There is something clearly better already happening compared to last year. We are just saying that we feel quite constructive. We're not saying that this seems there are no indications right now that this would implode tomorrow, rather being quite supportive of this could probably continue. On your second question around AirPlus, a reminder of where we are there. As we highlighted in the second quarter, the first critical milestones around IT migration, the discontinuation of non-core markets, and the right-sizing in the organization have been completed, and this process is on track. The next phase now is to increase the pace of implementation between AirPlus and the rest of the SEB core business. What we are now reviewing is if there are reasons to try and accelerate that phase. As you will remember, we gave a range around the cost target for 2025 of plus minus $300 million, as we said, largely attributable to the pace of implementation of AirPlus. It was in that context I made those comments. Thank you very much. Thank you. We will now take the next question from the line of Johan Ekbloem from UBS. Please go ahead. Thank you. Just to come back on some of the comments you made earlier around AI, I guess, you know, trying to figure out what AI could mean for your business longer term, there's two aspects to it, I guess, that I'm interested in. One is how do you think about the cost of AI? We hear a lot of stories about the cost of AI being heavily discounted today and that we should expect costs to increase materially as you get onto kind of normal rate cards for what you're paying. When do you expect to see concrete benefits in terms of efficiency or revenue opportunities that will be kind of obviously visible in the financials? That would be the first question. Secondly, just a bit of a detailed one on asset quality. I mean, we had a big green project that went belly up in Sweden earlier this year, and there's another one that's in the press now. Your corporate loan book tends to be very much focused on investment grade. How do you view these potentially higher credit risk projects, and how do you manage risk around those? I realize you probably can't comment on individual exposures, but just from a more kind of top-down view. Okay. If I start with this last, and on the hand, I think you asked mostly for the financial impact. I'll ask Christopher to reason around that on AI. The traditional loan book is investment grade. The really minimum rule of thumb is that you have to have three years of good cash flow that is proven, resilient business model, etc. That's what we do. There are, of course, also a very, very small part of the balance sheet that also gets dedicated to starting up of firms. The ones you mentioned, the larger green ones, they have been unusually very unique that they are of that magnitude. We have had very, very modest, if I say it that way, exposure that you won't really have seen, even though there has been a little bit of actually blowouts in the whole green and clean tech sector as we speak, and it's continuing. The other thing is to see that the capital stack of all these projects, if they're large, are very different from the past. They are namely predominantly government guaranteed, and there are risk and offsets. The nominal values often, if not always, exaggerate heavily what the banks actually are exposed to. There are two mitigating factors to any worry, and that is that the amount is very small, and it's often guaranteed somewhere between 60% to 85% by a government. If I reason a little bit around the AI and the financial impact, and you're right that we are at an early stage, trying to assess and quantify the ultimate impact is still difficult. I'll make a few comments. I think in terms of the benefits that we can already see, there are certainly some areas where we do see tangible efficiency gains and productivity enhancements. One is in software development, where we see the use of copilots increasing developer productivity and outputs and deploys. Another area is in wealth and asset management, where we can see an increase in the number of outbound customer calls as a result of AI supporting documentation. We see those productivity gains. How does that translate into P&L? One of the comments that we made around the hiring calls that we're having is to consistently ask the question when we do replacement hires if there is a technology or an AI solution that could be levered for that same activity. We will see this gradually coming through. In terms of the cost of the actual AI, one of the reasons we decided to team up with a couple of other companies in the Wallenberg's sphere to invest in the compute power from Nvidia here in Sweden is partly to get access to sovereign access to compute, but also to ensure the cost. To your point, buying compute power from the large compute providers around the world is, of course, an exposure that anyone would have if you want to grow and expand in AI. That is also, for us, a level of comfort to have that cost under our own control. Those are some comments, but as you point out, it is still early days, and we are following it very closely, and the early signs that we're seeing are constructive productivity enhancements. Thank you. Thank you. We will now take the next question from the line of Sophie Peterson from Goldman Sachs. Please go ahead. Yeah, hi. This is Sophie from Goldman Sachs. Thanks a lot for taking my question. My first question would be on the fee line. The kind of softness that we saw in fees this quarter, was that reflecting margin pressure, or was it just less volumes than expected? If you could just discuss a little bit margin pressure compared to the volumes on the fee side. My second question would be around capital. What we are seeing is that the fiscal outlook or fiscal spending next year is quite good for Sweden. A macro outlook is improving. Should loan growth pick up for SEB? How do you think about prioritizing growth over shareholder returns, and what takes priority if you look at growth versus dividends versus share buybacks versus any potential M&A? Thank you. Thank you. Thank you, Sophie. If I start with the fees, the sequential development there is really in three areas where we see this. First, within CIB, and as Johan alluded to a little bit, even though activity level is benign in the third quarter, it was very strong in the second quarter. You see the drop in fees and commissions sequentially of about SEK 400 million, being partly attributable to activity levels and fees in CIB. The second component you'll see is card fees in BRB, particularly on the corporate side. As you know, we are in our BRB card business more exposed to corporate activity than private activity. That being slower during the summer month is a second explanation. The positive effect and partly offsetting this is an increase in fees and commissions on AUM-related fees in wealth and asset management. There's no margin development impacting sequentially in the quarter, but more how the fees have fallen between Q2 and Q3. Hey, Sophie, nice to hear that you're back in a different role. Welcome. I would say that the reason for the more optimistic outlook, as you also pointed to, is partly driven by the monetary stimulus that we've already seen. Let that bite in the economy. Monetary policy typically works with a 12 to 18-month lag, but also, as you pointed out, the fiscal stimulus that is expected to come. Those two, I think, are quite important pillars for economists when they do look at it. Will this increase loan demand? That's the purpose of it. Both the monetary policy wants the economy to pick up in pace and particularly focus on consumption. Fiscal policy tends to be quite effective on consumption. The pattern right now is because uncertainty is high, risks are very mitigated in my book, but uncertainty is still around. It means that households have been quite keen to save rather than consume. All this is kind of part of that package to become a little bit more constructive for the future, and it should be supportive of growth. That prediction I'm not making, I'm just reasoning around it. It's definitely a part of it. When it comes to priority between growth and shareholder return, I assume you mean shareholder repatriation and not just total shareholder return because I think growth in SEB, having more clients, doing more with them, is very much aligned with total shareholder return. That's the same thing. Of course, you might want to save more capital for the business rather than repatriating it. There it's pretty easy. We always try to develop the bank first. I would love to use the capital that we generate to do more business to generate even more. That's typically not a big conflict. Otherwise, as we've had for many years now, we generate more than we can redeploy, and then we'll pay it out to shareholders. Okay. That's very clear. Maybe just on the fee side, one follow-up. In terms of DNB Carnegie, you haven't seen any business opportunities gaining any, being able to take any market share from them? No, I also want to acknowledge that it's a formidable competitor, and they're very good. This is not an easy market to win in, and it's getting tough out there. Okay. Very clear. Thank you. Thank you. We will now take the next question from the line of Tariq El-Mijad from Bank of America. Please go ahead. Hi, good morning. I just wanted to come back on Johan's long question as well on AI from a different angle. You know, the scalability of use of AI and the benefits also, I think, is based on how your core systems can actually be plugged to these AI tools. How do you consider today your IT system ready for this, I would say, evolution in terms of using for AI, especially in your triangle on the parts on integration into the products? Also, I mean, there is a perception that the cost to achieve is actually much lower using AI versus the traditional kind of cost-savings measures in the past. Would you confirm that perception? Just very quickly on the capital part, Sophie, I think I addressed that partly, but I think you commented in the past that to go below the 300 basis points buffer or the high end of the range, that would be used for growth rather than special distribution on the buyback. Given the headwinds on CET1 coming on RWA coming in the next quarters from the add-ons on Baltics, should we assume that now the priority is for volume growth and the buyback would probably be secondary here? Thank you. If I start with the question on AI, you're right that there is a broader upgrade of core systems in general required to some extent. This reflects our ongoing work with our technology roadmaps that have been in place for some time. There are also opportunities in multiple areas where AI can be applied without necessarily completing all those upgrades. There are also ways where we can work with compartmentalizing certain parts of our legacy technology and making APIs available for new applications. A third option that is also interesting to explore is actually to have some of that legacy code rewritten with the help of AI. There are ways both in which we can address the challenges with traditional legacy systems, but also where we can proceed without necessarily completing those investments. When it comes to the triangle, I think you're right to say that from a product perspective, it's probably where progress has been the least thus far in terms of introducing and implementing AI capabilities in the products. Where we have thus far seen the best impact and the greatest achievements thus far has been in running. What we're highlighting this quarter as well is, of course, the interesting opportunity working with a growing and exciting AI community in Sweden and the Nordics. We'll continue to, of course, monitor this closely, but there are certainly areas where we can accelerate with AI implementation in parallel with legacy upgrades. Yeah, and if I just may add, it's interesting. We had the IMF, IIF trip to Washington where all bankers met last week, that it is a clear distinction, the ones selling AI capabilities between the ones buying them and selling them and how much value has been created lately. This third point that Christopher made, the third leg, is actually us banking the AI community, which is doing very, very well. On the capital repatriation preferences, let's say that if we are above 300, as we have a stated target board mandate to be in the range of 1 to 300, we have one type of dialogue. That is how to best come back to the range where the 300 is the upper end. That's the discussion we've had for three years from the day we had to cancel the dividends post-COVID. Of course, that kind of is the new now. If we're in the range, we have a more forward-looking discussion in the board in December where we typically have room for both. Don't assume that you cannot do a share buyback only because you're in the range. However, there is a different discussion. It's more about if lending and if we want to retain it to improve business of over and beyond 15% return on equity. If there's a reasonable degree of probability we know how to do that in the coming years, we'd like to be able to capitalize on that. If not, then, of course, it becomes more of a question of how to repatriate capital to the shareholders with a base 50% of profits go in the form of dividend. As you can see in history, we've used both extra dividends in combination with share buybacks to look at. That's the forward looking. I also would say just the numbers, you need pretty significant loan growth numbers for this not to be able for SEB not to be able to do capital repatriation in a combination of two or three types. It would be lovely if that would happen, but that's a luxury problem. Thank you very much. Very clear. Thank you. We will now take the next question from the line of Nicholas McBeath from DNB Carnegie. Please go ahead. Thank you. Good morning. My first question was on the NFI line, which came in a bit below recent quarters in Q3. I was wondering how you think about how the lower interest rate environment is affecting this revenue line. With your current macro outlook for 2026, how confident are you that your previous indication of the past 16 quarters' average is a good indication where the normalized NFI line should be? How do you think about that given the ultimate macro outlook for the next year with, yeah, maybe lower interest rates and possibly also lower volatility than what we've seen in the past few years? Thank you, Nikola. I think within that number that you have in the NFI number, for us, these are to a large extent customer-related income. Taking aside the strategic stakes and the mark-to-market and the valuation gains that we present separately and the XVAs, we have a significant proportion of our FICC business booked within NFI. Within the FICC, we have the fixed income, currencies, and commodities. If I look at the third quarter, we had, after the very high level of volatility in the second quarter, a lower level of volatility in the third quarter in FX, which resulted in a somewhat slower activity related to our customer demand. Within fixed income, on the other hand, activity levels remained high with credit spreads at very low levels, issuance continues, and there was a clear demand to pre-fund during those favorable conditions. Within commodities, we are, as you know, the one Nordic bank that does offer this, and we have seen that contribution growing. There is an element of volatility, but we think that the underlying structural development there is also constructive. As we look forward, there are effects driving this. The volatility in FX space and the demand for FX products will be impacting that part of the FICC booked in NFI. We also have the steepness of the yield curve, which impacts the treatment of the inventory and the mark-to-market of the inventory within the fixed income in NFI as well. At this point in time, we have our range, and I think that remains our best prediction for the future. All right. I had a question on if you have any general remarks or thoughts, how you're reasoning regarding the cost growth into 2026. I mean, on the one hand, you have lower rates, which are a drag on return on equity, but on the other hand, as you alluded to in the call, potentially higher activity, loan growth, economic recovery during next year. Do you think 2026 is the year to expand and invest more or keep the hiring freeze and try and defend the profitability? Yeah, thank you, Nicola. I'll start and ask Christopher to add. The current, let's call it, plan of attack on cost control is the one that we, I think, launched last quarter or two quarters ago, and that is to change the pathway that we've been on for some years now of increasing investments in the bank and to tail that increase off. As you can see, this quarter, it looks to be supportive of actually happening. We are in a different place now where you have a different trajectory. The purpose is to sit when we do our business plan in December and hopefully be in a position where we have freed up some operational costs that we can discuss with the board and the management team how to redeploy. It is still a different type of forward outlook now than we've had for the last years, and that is more cost controlled, be cautious, and handle resources a little bit more until we have a clearer look on the income outlook because we really need to have a high return on equity and a low marginal cost of income, so profitability is secure if we were to start investing more. There are many other things, you know, must-do investments in the bank. There's no lack of holes to put all this money in order to maintain a good and solid and robust infrastructure. It is the same tonality we've used now for a couple of quarters. There's no change in that, and that goes beyond the year-end. It's actually to have a little bit of extra flexibility going forward. That doesn't mean that the decision in December where we set the cost frame for 2026 will be up, flat, or down. It just means that there will be a discussion to be had, and we'll communicate it as always in conjunction with the Q4 report. All right. Thank you. Just a bit of a follow-up question. Could you please give us the AirPlus implementation costs for Q3, and how you think about the implementation costs in 2026? Yeah. The AirPlus implementation cost in the third quarter was around SEK 120 million, which means that we year to date have taken a little bit less as a run rate, which leaves a little bit more in the fourth quarter. We have guided to around SEK 700 million in implementation costs for the full year. For next year, how do you think about those costs developing? As I referred to earlier, we are now reviewing whether there are parts of the implementation program that should be accelerated. We'll be coming back to that together with the cost outlook for 2026, together with our fourth quarter results, Nicola. All right. Perfect. Thank you. Thank you. Thank you. We will now take the next question from the line of Ricardo Rivera from Mediobanca. Please go ahead. Thanks. Thanks a lot for taking my questions. I have three if possible. The first one is on the NII indication, Christopher, that you provided early in the call, meaning NII to bottom out three to six months after the last cuts. Now, raising in the euro area should be done. The Riksbank has cut 25%, okay, I understand the impact on the equity side. The Federal Reserve should cut much more aggressively. You have a much larger amount of U.S.-denominated liabilities than assets. It's $300 billion larger amount of liabilities in dollar. I was wondering why the rate cuts by the Federal Reserve should not have a mitigating impact for the only 25 bps rate cut by the Riksbank. By the way, also this quarter, what you this indication should have happened and did not materialize, NII is actually up quarter on quarter. I was wondering why you keep reiterating that given the Federal Reserve cut expected in the coming quarters. The second question I have is on the 290 bps buffer. If I'm not mistaken, this includes the whole $50 billion of RWA add-on imposed by the ECB on your Baltic operations, just to confirm my understanding correctly. If I understand it correctly, 290 is already at the top of your range in terms of management buffer when you're expecting to go back to that level in only three months. If that is the way I understand, it's just a matter of how you want to return excess capital rather than if you can keep the current capital return. What is your thinking about that? I have a question of curiosity that's more of curiosity. Overlays go up by $100 million if I'm not mistaken. Some other Nordic banks have actually reduced them or brought it to zero. They're using it, progressively releasing those. Why do you keep accumulating those overlays? When do you expect this to come to an end or this to be used at some point or released or allocated? Thanks. Thank you for your questions. I'll start and I'll let Johan contribute as well. We're just going to make sure we have the questions correctly. If I start with the overlay, that is an assessment that we do every quarter. We take into account geopolitical developments. Sometimes we change our macro outlook and assumptions. It's a continuous evaluation of our various exposures across our portfolios. You have also seen in quarters that we have released some of those overlays, and in this quarter, we're adding. It's hard for us, of course, to comment on how other banks are proceeding with this, but that is our process. For the net interest income, you're right. We are reiterating the expectation of a three to six-month lag from the last rate cut till we see the trough. What happened in this quarter were a couple of technicalities that led to an increase in net interest income sequentially. One is the number of days. We also refer to the deposit insurance fee that is booked over the year that happened to tilt a little bit more favorably for NII in this quarter. We had a positive FX effect. We also saw some beneficial treasury contributions, partly from the funding costs and what we have been referring to as repricing effects or timing effects. As we then look forward, we continue to see pressure on deposit margins as the rate cuts will make their way through the balance sheet. Also bearing in mind that some of our transaction accounts, both for corporates and households, are down to zero, which means that, of course, the further down we come in the rate cycle, the more any incremental cut will have as an impact. Finally, to your comment around the U.S.-denominated deposits, those are primarily wholesale deposits. Those are priced off of market rates, and that's effectively a margin that moves with market rates, rather than having an impact as they are being discretionary priced. They are market-rate linked. On your question on... This will go down. This will go down. The Fed will cut this stuff, this will go down. The cost of this stuff will go down. share buyback program is progressing as planned. When they... Yes. Of this wholesale funding, and it's SEK 400 billion. Right. Correct. Of course, the impact will then be on the asset side when rates are being cut, when we have U.S.-denominated loans that they are funded by. Sure. It's smaller than that. The delta is smaller. The liabilities are much, much larger than the assets in dollars. Much larger. $300 billion. Right. In fact. What we have also mentioned when it comes to the U.S.-denominated deposits is the funds that we're also placing with the Fed. That is effectively us operating in the U.S. with our balance sheet, and we would collect deposits from U.S. financial institutions and place them with the Fed. That is effectively a relatively opportunistic business that we have been running there, and that goes to an element of lumpiness between quarters, but that accounts for a sizable part of the U.S.-denominated deposits as well. All right. What I see is $187.88 billion cash at the Federal Reserve, I guess, and you have $408.9 billion deposits, which you say is wholesale, is going to go down. There's one number here is more than twice the other. I don't understand how this cannot be positive, regardless of FX and all the other stuff. I think... Calendar days, whatever. No, I think this is one of many moving parts in the balance sheet. When we are looking at the impact in totality from the rate cuts, there are various dimensions moving in different directions. This is one impact that we get from the development of the Fed funds. We have other parts of the balance sheet that's impacted by the ECB rates and others from the Riksbank. It is taking all these into consideration together, where we conclude that running this through our balance sheet as it looks today, we expect the trough. It doesn't mean that all the variables go in the same direction. Some, to your point, might be contributing positively, but the net of it all, we expect to result in a trough three to six months after the last cut. All right. Okay, good. Thanks. Thank you. The 290. Sorry, can you repeat that question, Ricardo? The question is 290 is already the top of your, basically, the top of your management buffer, and that 290 includes the whole 50 billion, you know, which should be, as far as I remember, phased progressively. If I'm not mistaken, you got 10 billion this quarter. Maybe you will have another 10 billion next quarter. I don't know. The real number is the 290. That is already at the top of your buffer. How do you see this? Is this where you're expecting it to be, already basically at the top of your buffer only with the whole impact of the ECB imposed add-on after only three months? There has been, let's say, some discussion around the impact of this stuff into mostly 2026, affecting your capital return, blah, blah, blah, blah, blah. Yeah, I think we understand that. I can just start, Ricardo, with confirming that we have taken in this quarter the equivalent of 18 basis points, so a 10 billion phase-in of RWA in the Baltics, and we're showing that the remaining, what we estimate to be another 70 basis point impact, would take our pro forma buffer to 290 basis points, where we have booked so far in this quarter 10 billion of that. Just to be clear, that's the pro forma today. I think you're absolutely right. It's the 290 if we would technically have deducted all of it, and it would have been over. As we, for accounting reasons and other things, couldn't or wouldn't do that, we just showed it pro forma. You have, as I think you alluded to, now capital generation in the dynamic analysis going forward will, of course, continue to increase this number, everything else being equal. Therefore, I think that we will have a better position when we get to Q4, and we will have to look at the current capital position then in a quarter to then for the board deliberations on repatriation. Was that an answer? Yeah. Definitely, that's an answer. $290 before you start accruing the dividend, 50% payout or whatever it is, and the rest we'll see. The starting point is $290. Yeah. Correct. Yeah, yeah. Okay, fair enough. Thanks. Thank you very much. Thank you. We will now take the next question. It's your question from Bettina Thurner from BNP Paribas Exane. Please go ahead. Yeah. Hi. Good morning. I would just have two clarification questions, please. The first one on NII. You have been quite helpful over the past few quarters to try and isolate the temporary effect in the net interest income base. For this quarter, should we look at the effect in treasury that you mentioned before of repricing quicker? Is that the 100 million, or would there be other parts of the NII that you would also expect to get out again or reverse partially in the last quarter of this year or first quarter of next year? The second question would be on the dividend. At the start of this year, you said you had the intention to pay out a seven-annual dividend next or in the next year. Is that still the plan, or are you still deciding on that? If you could just give a small update on that, please. Thank you. Thank you, Bettina. On your first question on net interest income, I think the number that you're referring to, the $100 million or so as a positive impact in Q3 from those timing effects, is the number that you should have in mind for that effect going forward. For the semiannual dividend, you're right. That is something that we mentioned at the start of the year, and we have ongoing dialogues with our shareholders. That's something we'll come back to when we report our fourth quarter results and come back to the capital question. If I can just double-check, it's not set in stone yet, let's say, on the semiannual dividend? Correct. That's correct. Okay, perfect. Thank you very much. Thank you. That's all the time we have for questions today. I would like to hand back over to Johan Torgeby for closing remarks. I'll just say thank you, everyone, for your participation and your interest in SEB, and look forward to seeing you soon. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker 2: Today, and thank you for standing by. Welcome to the SEB Financial Results Q3 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Johan Torgeby, CEO. Please go ahead. Today, and thank you for standing by. today and thank you for standing by Welcome to the SEB Financial Results Q3 2025 conference call. welcome to the seb financial results q3 2025 conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode After the speaker's presentation, there will be a question and answer session. after the speaker's presentation there will be a question and answer session To ask a question during the session, you will need to press 1 1 on your telephone. to ask a question during the session you will need to press 1 1 on your telephone You will then hear an automated message advising your hand is raised. you will then hear an automated message advising your hand is raised To withdraw your question, please press 1 1 again. to withdraw your question please press 1 1 again Please be advised that today's conference is being recorded. please be advised that today's conference is being recorded I would now like to hand the conference over to your speaker today, Johan Torgeby, CEO. i would now like to hand the conference over to your speaker today johan torgeby ceo Please go ahead. please go ahead

Speaker 4: Good morning, and I'd like to extend a warm welcome to all of you today for SEB's Q3 financial results. Going to our first page with highlights, we today post a solid financial result in a quarter which is seasonally slower, but we've also experienced less volatile and stable financial markets. Noteworthy is that investment banking activity has held up and showed resilience, and we saw an increase in capital markets activity to the later half of the quarter. Customer satisfaction and employee engagement continue to show relative strength, and it has been decided to continue the $2.5 billion share buyback program per quarter by the board as we announced today. Flipping to the next page, we have some recent events, and the first one is the infrastructure of payments, which is now being disrupted to some degree by new technology coming from blockchain. Good morning, and I'd like to extend a warm welcome to all of you today for SEB's Q3 financial results. good morning and i'd like to extend a warm welcome to all of you today for seb's q3 financial results Going to our first page with highlights, we today post a solid financial result in a quarter which is seasonally slower, but we've also experienced less volatile and stable financial markets. going to our first page with highlights we today post a solid financial result in a quarter which is seasonally slower but we've also experienced less volatile and stable financial markets Noteworthy is that investment banking activity has held up and showed resilience, and we saw an increase in capital markets activity to the later half of the quarter. noteworthy is that investment banking activity has held up and showed resilience and we saw an increase in capital markets activity to the later half of the quarter Customer satisfaction and employee engagement continue to show relative strength, and it has been decided to continue the $2.5 billion share buyback program per quarter by the board as we announced today. customer satisfaction and employee engagement continue to show relative strength and it has been decided to continue the $2.5 billion share buyback program per quarter by the board as we announced today Flipping to the next page, we have some recent events, and the first one is the infrastructure of payments, which is now being disrupted to some degree by new technology coming from blockchain. flipping to the next page we have some recent events and the first one is the infrastructure of payments which is now being disrupted to some degree by new technology coming from blockchain We have, together with eight other European banks, launched a consortium with an initiative to see if we can launch a euro-denominated stablecoin on the chain, targeting the first half of 2027. Also, AirPlus has now been used as the new brand for our previous Eurocard, and this is an example of the marketing campaign, particularly towards the Scandinavian countries where Eurocard has been a long prevailing brand within the corporate card segment. It has now been rebranded under the headline "Green is the New Gold," and if you haven't already, you will soon get an AirPlus instead of your Eurocard in the color scheme represented here on the slide. Turning to page four, we have, over the last couple of quarters, updated you on our progress within AI. We have, together with eight other European banks, launched a consortium with an initiative to see if we can launch a euro-denominated stablecoin on the chain, targeting the first half of 2027. we have together with eight other european banks launched a consortium with an initiative to see if we can launch a euro-denominated stablecoin on the chain targeting the first half of 2027 Also, AirPlus has now been used as the new brand for our previous Eurocard, and this is an example of the marketing campaign, particularly towards the Scandinavian countries where Eurocard has been a long prevailing brand within the corporate card segment. also airplus has now been used as the new brand for our previous eurocard and this is an example of the marketing campaign particularly towards the scandinavian countries where eurocard has been a long prevailing brand within the corporate card segment It has now been rebranded under the headline "Green is the New Gold," and if you haven't already, you will soon get an AirPlus instead of your Eurocard in the color scheme represented here on the slide. it has now been rebranded under the headline "green is the new gold," and if you haven't already you will soon get an airplus instead of your eurocard in the color scheme represented here on the slide Turning to page four, we have, over the last couple of quarters, updated you on our progress within AI. turning to page four we have over the last couple of quarters updated you on our progress within ai We have shown you the internal projects that we're running, about 130, which is funneling in in different categories of areas we think we can improve, but also gone through the recent investment that we've done together with a consortium to get compute capabilities available to us. Today, I'd like to introduce the third corner of this triangle, which is actually SEB not only working with offering better products, integrating it in the products, not only running the bank using AI, but actually enabling banking in the AI community, which is the core business we do. We speak a lot about different business units in the bank, but this is probably one of the lesser-known ones. We have shown you the internal projects that we're running, about 130, which is funneling in in different categories of areas we think we can improve, but also gone through the recent investment that we've done together with a consortium to get compute capabilities available to us. we have shown you the internal projects that we're running about 130 which is funneling in in different categories of areas we think we can improve but also gone through the recent investment that we've done together with a consortium to get compute capabilities available to us Today, I'd like to introduce the third corner of this triangle, which is actually SEB not only working with offering better products, integrating it in the products, not only running the bank using AI, but actually enabling banking in the AI community, which is the core business we do. today i'd like to introduce the third corner of this triangle which is actually seb not only working with offering better products integrating it in the products not only running the bank using ai but actually enabling banking in the ai community which is the core business we do We speak a lot about different business units in the bank, but this is probably one of the lesser-known ones. we speak a lot about different business units in the bank but this is probably one of the lesser-known ones In 2022, we created a business unit called SEB Growth, where we now have an offering tailored for fast-growing companies with high innovative content and companies that plan to raise capital and/or list or sell themselves in the future. This is an attempt to combine corporate banking with investment banking with private banking for those entrepreneurs and these fairly young companies as they begin their journey. We've also included a few of the logos which we have recently supported, such as Lovable, Sauna, Modal, and Legora. All these are well-known fast-growing companies in the AI space in Scandinavia. The next page, we can then look at the development of our credit and lending portfolio. As all of you are aware, we've had a little bit of a sideline movement in recent years. However, both last quarter and this quarter, we have some growth, albeit modest. In 2022, we created a business unit called SEB Growth, where we now have an offering tailored for fast-growing companies with high innovative content and companies that plan to raise capital and/or list or sell themselves in the future. in 2022 we created a business unit called seb growth where we now have an offering tailored for fast-growing companies with high innovative content and companies that plan to raise capital and/or list or sell themselves in the future This is an attempt to combine corporate banking with investment banking with private banking for those entrepreneurs and these fairly young companies as they begin their journey. this is an attempt to combine corporate banking with investment banking with private banking for those entrepreneurs and these fairly young companies as they begin their journey We've also included a few of the logos which we have recently supported, such as Lovable, Sauna, Modal, and Legora. we've also included a few of the logos which we have recently supported such as lovable sauna modal and legora All these are well-known fast-growing companies in the AI space in Scandinavia. all these are well-known fast-growing companies in the ai space in scandinavia The next page, we can then look at the development of our credit and lending portfolio. the next page we can then look at the development of our credit and lending portfolio As all of you are aware, we've had a little bit of a sideline movement in recent years. as all of you are aware we've had a little bit of a sideline movement in recent years However, both last quarter and this quarter, we have some growth, albeit modest. however both last quarter and this quarter we have some growth albeit modest Lending year-on-year for the corporate book is up 4% FX-adjusted, and the total lending portfolio is up 3% FX-adjusted, with households and Swedish mortgages just shy with half of that growth in the third quarter this year. Looking on the next page on the JAWS slide, we can see that the costs, the trajectory of costs is tailing off, and we are roughly back to trend that we had prior to the elevated profits generated by the interest increase, with a CAGR here represented from the time 2016 to 2021. With that, I'd like to end this part and hand over to the CFO, Christopher Malmer. Lending year-on-year for the corporate book is up 4% FX-adjusted, and the total lending portfolio is up 3% FX-adjusted, with households and Swedish mortgages just shy with half of that growth in the third quarter this year. lending year-on-year for the corporate book is up 4% fx-adjusted and the total lending portfolio is up 3% fx-adjusted with households and swedish mortgages just shy with half of that growth in the third quarter this year Looking on the next page on the JAWS slide, we can see that the costs, the trajectory of costs is tailing off, and we are roughly back to trend that we had prior to the elevated profits generated by the interest increase, with a CAGR here represented from the time 2016 to 2021. looking on the next page on the jaws slide we can see that the costs the trajectory of costs is tailing off and we are roughly back to trend that we had prior to the elevated profits generated by the interest increase with a cagr here represented from the time 2016 to 2021 With that, I'd like to end this part and hand over to the CFO, Christopher Malmer. with that i'd like to end this part and hand over to the cfo christopher malmer

Speaker 8: Thank you, Johan. I would now like to turn to financials on the next slide. Operating income for the third quarter declined from the previous quarter, reflecting typical seasonal patterns, notably within net fee and commission income, where the second quarter performance was particularly strong. Net financial income was impacted by market valuations of our strategic holdings during the quarter, which had a positive contribution in the second quarter. This valuation effect accounts for around SEK 500 million of the delta in net financial income between the quarters. Net interest income increased slightly despite continuously downward-trending interest rates, explained in part by the higher day count in the quarter, some positive effects from FX, slightly lower deposit insurance guarantee fee, and a lower short-term funding cost. Operating expenses declined slightly from the previous quarter, also following the usual seasonality. Thank you, Johan. thank you johan I would now like to turn to financials on the next slide. i would now like to turn to financials on the next slide Operating income for the third quarter declined from the previous quarter, reflecting typical seasonal patterns, notably within net fee and commission income, where the second quarter performance was particularly strong. operating income for the third quarter declined from the previous quarter reflecting typical seasonal patterns notably within net fee and commission income where the second quarter performance was particularly strong Net financial income was impacted by market valuations of our strategic holdings during the quarter, which had a positive contribution in the second quarter. net financial income was impacted by market valuations of our strategic holdings during the quarter which had a positive contribution in the second quarter This valuation effect accounts for around SEK 500 million of the delta in net financial income between the quarters. this valuation effect accounts for around sek 500 million of the delta in net financial income between the quarters Net interest income increased slightly despite continuously downward-trending interest rates, explained in part by the higher day count in the quarter, some positive effects from FX, slightly lower deposit insurance guarantee fee, and a lower short-term funding cost. net interest income increased slightly despite continuously downward-trending interest rates explained in part by the higher day count in the quarter some positive effects from fx slightly lower deposit insurance guarantee fee and a lower short-term funding cost Operating expenses declined slightly from the previous quarter, also following the usual seasonality. operating expenses declined slightly from the previous quarter also following the usual seasonality As the Swedish krona has continued to strengthen in the quarter, we are providing an updated FX-adjusted cost target for the full year of SEK 32.6 billion, compared to the original cost target of SEK 33 billion. We maintain our range of plus minus SEK 300 million around the cost target level, which is primarily related to the ongoing integration of AirPlus. Here, we see some potential scope for possibly accelerating that implementation program a little bit further. As mentioned at the start of this year and reiterated also here in the second quarter, we're now in a phase of consolidating our recent years of investment, which is resulting in a lower cost growth. We also maintain our external hiring pools for non-business-critical positions to facilitate this consolidation and to make room for continued investments in selected areas, notably within technology and AI. As the Swedish krona has continued to strengthen in the quarter, we are providing an updated FX-adjusted cost target for the full year of SEK 32.6 billion, compared to the original cost target of SEK 33 billion. as the swedish krona has continued to strengthen in the quarter we are providing an updated fx-adjusted cost target for the full year of sek 32.6 billion compared to the original cost target of sek 33 billion We maintain our range of plus minus SEK 300 million around the cost target level, which is primarily related to the ongoing integration of AirPlus. we maintain our range of plus minus sek 300 million around the cost target level which is primarily related to the ongoing integration of airplus Here, we see some potential scope for possibly accelerating that implementation program a little bit further. here we see some potential scope for possibly accelerating that implementation program a little bit further As mentioned at the start of this year and reiterated also here in the second quarter, we're now in a phase of consolidating our recent years of investment, which is resulting in a lower cost growth. as mentioned at the start of this year and reiterated also here in the second quarter we're now in a phase of consolidating our recent years of investment which is resulting in a lower cost growth We also maintain our external hiring pools for non-business-critical positions to facilitate this consolidation and to make room for continued investments in selected areas, notably within technology and AI. we also maintain our external hiring pools for non-business-critical positions to facilitate this consolidation and to make room for continued investments in selected areas notably within technology and ai The full-year cost target does imply that there are some effects to expect in the final quarter of the year. Net expected credit losses of around SEK 200 million or 3 basis points reflect an underlying stable asset quality, as also reflected in the continuous decline of stage 3 assets. We added around SEK 100 million to the portfolio overlays in the quarter, and we also had some sizable reversals. Imposed levies came down in the quarter as expected, reflecting the development of our Baltic levies, and our full-year guidance for imposed levies now, also including Riksbank's introduction of the interest-free deposit, now amounts to SEK 3.6 billion. That's up from the SEK 3.5 billion communicated in the second quarter. Tax rate of 21% in line with guidance, net profit for the quarter of SEK 7.7 billion, and the return on equity at 14%. The full-year cost target does imply that there are some effects to expect in the final quarter of the year. the full-year cost target does imply that there are some effects to expect in the final quarter of the year Net expected credit losses of around SEK 200 million or 3 basis points reflect an underlying stable asset quality, as also reflected in the continuous decline of stage 3 assets. net expected credit losses of around sek 200 million or 3 basis points reflect an underlying stable asset quality as also reflected in the continuous decline of stage 3 assets We added around SEK 100 million to the portfolio overlays in the quarter, and we also had some sizable reversals. we added around sek 100 million to the portfolio overlays in the quarter and we also had some sizable reversals Imposed levies came down in the quarter as expected, reflecting the development of our Baltic levies, and our full-year guidance for imposed levies now, also including Riksbank's introduction of the interest-free deposit, now amounts to SEK 3.6 billion. imposed levies came down in the quarter as expected reflecting the development of our baltic levies and our full-year guidance for imposed levies now also including riksbank's introduction of the interest-free deposit now amounts to sek 3.6 billion That's up from the SEK 3.5 billion communicated in the second quarter. that's up from the sek 3.5 billion communicated in the second quarter Tax rate of 21% in line with guidance, net profit for the quarter of SEK 7.7 billion, and the return on equity at 14%. tax rate of 21% in line with guidance net profit for the quarter of sek 7.7 billion and the return on equity at 14% We ended the quarter with a CET1 ratio of 18.2%. On the next slide, we turn to the development of the net interest income. On a divisional basis, the NII in Corporate and Investment Banking declined by around SEK 200 million, primarily reflecting a lower net interest income within Investor Services, which was elevated during the second quarter, and that was the dividend season, as we mentioned at the time. NII also within our Markets business was a little bit lower as customer activity came down for the season. From a volume perspective, lending within CIB declined in the quarter as some of the event-driven financing volumes generated earlier in the year rolled off, and that together with FX effects explained the majority of the move in the loan book compared to the second quarter. Year-on-year, lending to corporates within CIB increased by 3% on an FX-adjusted basis. We ended the quarter with a CET1 ratio of 18.2%. we ended the quarter with a cet1 ratio of 18.2% On the next slide, we turn to the development of the net interest income. on the next slide we turn to the development of the net interest income On a divisional basis, the NII in Corporate and Investment Banking declined by around SEK 200 million, primarily reflecting a lower net interest income within Investor Services, which was elevated during the second quarter, and that was the dividend season, as we mentioned at the time. on a divisional basis the nii in corporate and investment banking declined by around sek 200 million primarily reflecting a lower net interest income within investor services which was elevated during the second quarter and that was the dividend season as we mentioned at the time NII also within our Markets business was a little bit lower as customer activity came down for the season. nii also within our markets business was a little bit lower as customer activity came down for the season From a volume perspective, lending within CIB declined in the quarter as some of the event-driven financing volumes generated earlier in the year rolled off, and that together with FX effects explained the majority of the move in the loan book compared to the second quarter. from a volume perspective lending within cib declined in the quarter as some of the event-driven financing volumes generated earlier in the year rolled off and that together with fx effects explained the majority of the move in the loan book compared to the second quarter Year-on-year, lending to corporates within CIB increased by 3% on an FX-adjusted basis. year-on-year lending to corporates within cib increased by 3% on an fx-adjusted basis Within Business and Retail Banking, NII declined by around SEK 100 million compared to the previous quarter, and that's primarily reflecting the impact from lower interest rates on deposit margins. Lending volumes were largely unchanged in the quarter, and following two strong quarters of market share gains in the Swedish mortgage market, Q3 volumes grew a little bit less than the market. Year to date, our net sales of mortgages represent a market share of around 13%, which is in line with our share of the stock. Competition in the market remains firm, and mortgage margins moved largely sideways in the quarter, remaining at historically low levels. Within our Baltic banks, net interest income was largely unchanged as the impact from lower interest rates was partly offset by higher lending and deposit volumes across both private and corporate customers. Within Business and Retail Banking, NII declined by around SEK 100 million compared to the previous quarter, and that's primarily reflecting the impact from lower interest rates on deposit margins. within business and retail banking nii declined by around sek 100 million compared to the previous quarter and that's primarily reflecting the impact from lower interest rates on deposit margins Lending volumes were largely unchanged in the quarter, and following two strong quarters of market share gains in the Swedish mortgage market, Q3 volumes grew a little bit less than the market. lending volumes were largely unchanged in the quarter and following two strong quarters of market share gains in the swedish mortgage market q3 volumes grew a little bit less than the market Year to date, our net sales of mortgages represent a market share of around 13%, which is in line with our share of the stock. year to date our net sales of mortgages represent a market share of around 13% which is in line with our share of the stock Competition in the market remains firm, and mortgage margins moved largely sideways in the quarter, remaining at historically low levels. competition in the market remains firm and mortgage margins moved largely sideways in the quarter remaining at historically low levels Within our Baltic banks, net interest income was largely unchanged as the impact from lower interest rates was partly offset by higher lending and deposit volumes across both private and corporate customers. within our baltic banks net interest income was largely unchanged as the impact from lower interest rates was partly offset by higher lending and deposit volumes across both private and corporate customers Loan growth in the Baltics remained robust, with mortgage growth around 9% and corporate loan growth at around 8% compared to last year. Within Treasury, NII was positively impacted by the yield curve as well as favorable funding conditions within short-term funding. Looking forward, we continue to expect our net interest income to bottom out some three to six months after the latest or the last rate cut. Bear in mind that is based on how our balance sheet looks today, so volume growth and any proactive repricing could impact those dynamics. We turn to the next slide, and we look at the fee and commission income in the quarter. Total fees and commissions declined by around SEK 400 million compared to the previous quarter, and if we look on a divisional basis, we effectively see three developments behind this. Loan growth in the Baltics remained robust, with mortgage growth around 9% and corporate loan growth at around 8% compared to last year. loan growth in the baltics remained robust with mortgage growth around 9% and corporate loan growth at around 8% compared to last year Within Treasury, NII was positively impacted by the yield curve as well as favorable funding conditions within short-term funding. within treasury nii was positively impacted by the yield curve as well as favorable funding conditions within short-term funding Looking forward, we continue to expect our net interest income to bottom out some three to six months after the latest or the last rate cut. looking forward we continue to expect our net interest income to bottom out some three to six months after the latest or the last rate cut Bear in mind that is based on how our balance sheet looks today, so volume growth and any proactive repricing could impact those dynamics. bear in mind that is based on how our balance sheet looks today so volume growth and any proactive repricing could impact those dynamics We turn to the next slide, and we look at the fee and commission income in the quarter. we turn to the next slide and we look at the fee and commission income in the quarter Total fees and commissions declined by around SEK 400 million compared to the previous quarter, and if we look on a divisional basis, we effectively see three developments behind this. total fees and commissions declined by around sek 400 million compared to the previous quarter and if we look on a divisional basis we effectively see three developments behind this Firstly, within Corporate and Investment Banking, fees are seasonally softer in Q3 across most capital markets-related businesses, including issuance of securities and advisory, which was also particularly strong in the second quarter. This is also true for lending fees, and combined, these effects accounted for around SEK 400 million in CIB. Nonetheless, CIB generated the highest net commission income on record for a third quarter. The second factor related to card and payment fees within Business and Retail Banking, and again, seasonal patterns impacting the activity levels primarily within corporate cards and AirPlus, and this affects around SEK 100 million compared to the previous quarter. Thirdly, going in the other direction, we saw about SEK 100 million increase in fees and commissions in Wealth and Asset Management as a result of higher assets under management and continued business momentum. Firstly, within Corporate and Investment Banking, fees are seasonally softer in Q3 across most capital markets-related businesses, including issuance of securities and advisory, which was also particularly strong in the second quarter. firstly within corporate and investment banking fees are seasonally softer in q3 across most capital markets-related businesses including issuance of securities and advisory which was also particularly strong in the second quarter This is also true for lending fees, and combined, these effects accounted for around SEK 400 million in CIB. this is also true for lending fees and combined these effects accounted for around sek 400 million in cib Nonetheless, CIB generated the highest net commission income on record for a third quarter. nonetheless cib generated the highest net commission income on record for a third quarter The second factor related to card and payment fees within Business and Retail Banking, and again, seasonal patterns impacting the activity levels primarily within corporate cards and AirPlus, and this affects around SEK 100 million compared to the previous quarter. the second factor related to card and payment fees within business and retail banking and again seasonal patterns impacting the activity levels primarily within corporate cards and airplus and this affects around sek 100 million compared to the previous quarter Thirdly, going in the other direction, we saw about SEK 100 million increase in fees and commissions in Wealth and Asset Management as a result of higher assets under management and continued business momentum. thirdly going in the other direction we saw about sek 100 million increase in fees and commissions in wealth and asset management as a result of higher assets under management and continued business momentum Net new money across the group amounted to SEK 8 billion in the quarter. On fees and commissions, when we closed the second quarter, we referred to a more constructive fee environment, and while Q3 will see or should see some usual seasonal patterns, which we've seen, we said that if the market backdrop doesn't change dramatically, Q4 should see a continuation of this more constructive trend. This comment, we think, remains valid, which is encouraging going into the last quarter of the year. If we turn to the next slide, we set out the development of net financial income this quarter. NFI from the divisions was largely unchanged from the previous quarter at SEK 1.9 billion. Net new money across the group amounted to SEK 8 billion in the quarter. net new money across the group amounted to sek 8 billion in the quarter On fees and commissions, when we closed the second quarter, we referred to a more constructive fee environment, and while Q3 will see or should see some usual seasonal patterns, which we've seen, we said that if the market backdrop doesn't change dramatically, Q4 should see a continuation of this more constructive trend. on fees and commissions when we closed the second quarter we referred to a more constructive fee environment and while q3 will see or should see some usual seasonal patterns which we've seen we said that if the market backdrop doesn't change dramatically q4 should see a continuation of this more constructive trend This comment, we think, remains valid, which is encouraging going into the last quarter of the year. this comment we think remains valid which is encouraging going into the last quarter of the year If we turn to the next slide, we set out the development of net financial income this quarter. if we turn to the next slide we set out the development of net financial income this quarter NFI from the divisions was largely unchanged from the previous quarter at SEK 1.9 billion. nfi from the divisions was largely unchanged from the previous quarter at sek 1.9 billion The decline in the headline NFI versus the previous quarter is, as I mentioned, largely explained by valuation effects related to our strategic holdings, and that's primarily in Euroclear, which also paid a dividend during the second quarter affecting that comparability. These effects were partly offset by XVA going the other way, and we continue to look at the long-term average of around SEK 2.5 billion per quarter. Turning to the next slide, we'll look at the development of the CET1 ratio in the quarter. We closed the second quarter with a management buffer at 290 basis points. The decline in the headline NFI versus the previous quarter is, as I mentioned, largely explained by valuation effects related to our strategic holdings, and that's primarily in Euroclear, which also paid a dividend during the second quarter affecting that comparability. the decline in the headline nfi versus the previous quarter is as i mentioned largely explained by valuation effects related to our strategic holdings and that's primarily in euroclear which also paid a dividend during the second quarter affecting that comparability These effects were partly offset by XVA going the other way, and we continue to look at the long-term average of around SEK 2.5 billion per quarter. these effects were partly offset by xva going the other way and we continue to look at the long-term average of around sek 2.5 billion per quarter Turning to the next slide, we'll look at the development of the CET1 ratio in the quarter. turning to the next slide we'll look at the development of the cet1 ratio in the quarter We closed the second quarter with a management buffer at 290 basis points. we closed the second quarter with a management buffer at 290 basis points During the quarter, from left to right, as usual, we received an updated SREP update from our supervisor, and as you will have seen in our separate disclosure on that topic, this resulted in a lower Pillar 2 requirement related to lower capital impact from IRRBB interest rate risk in the banking book. We add 41 basis points reflecting the net profit in the quarter after deducting our dividend accrual while lower risk RIA contributes about 14 basis points reflecting positive risk migration in the book during the quarter. Under RIA other, you will find a combination of other developments on the balance sheet, the FX effect, the overall RIA size, market risk RIA, and also a positive impact from us applying the SME factor to some of our CRE exposures. These factors in total added 22 basis points and were largely evenly distributed between them. During the quarter, from left to right, as usual, we received an updated SREP update from our supervisor, and as you will have seen in our separate disclosure on that topic, this resulted in a lower Pillar 2 requirement related to lower capital impact from IRRBB interest rate risk in the banking book. during the quarter from left to right as usual we received an updated srep update from our supervisor and as you will have seen in our separate disclosure on that topic this resulted in a lower pillar 2 requirement related to lower capital impact from irrbb interest rate risk in the banking book We add 41 basis points reflecting the net profit in the quarter after deducting our dividend accrual while lower risk RIA contributes about 14 basis points reflecting positive risk migration in the book during the quarter. we add 41 basis points reflecting the net profit in the quarter after deducting our dividend accrual while lower risk ria contributes about 14 basis points reflecting positive risk migration in the book during the quarter Under RIA other, you will find a combination of other developments on the balance sheet, the FX effect, the overall RIA size, market risk RIA, and also a positive impact from us applying the SME factor to some of our CRE exposures. under ria other you will find a combination of other developments on the balance sheet the fx effect the overall ria size market risk ria and also a positive impact from us applying the sme factor to some of our cre exposures These factors in total added 22 basis points and were largely evenly distributed between them. these factors in total added 22 basis points and were largely evenly distributed between them Finally, the decline of 18 basis points reflects the phasing in of the RIA increase in the Baltic banks that we announced in the second quarter, and that is related to the ongoing work with our Baltic IRB models. This takes the CET1 buffer to 360 basis points at the end of September, and we also highlight that the remaining impact from the Baltic RIA increase is around 70 basis points, in line with the communication at the time of the second quarter, and we expect to phase this in over the coming three quarters. That means that our buffers, in effect, on a pro forma basis stand at 290 basis points with the Baltic RIA fully phased in. Finally, the decline of 18 basis points reflects the phasing in of the RIA increase in the Baltic banks that we announced in the second quarter, and that is related to the ongoing work with our Baltic IRB models. finally the decline of 18 basis points reflects the phasing in of the ria increase in the baltic banks that we announced in the second quarter and that is related to the ongoing work with our baltic irb models This takes the CET1 buffer to 360 basis points at the end of September, and we also highlight that the remaining impact from the Baltic RIA increase is around 70 basis points, in line with the communication at the time of the second quarter, and we expect to phase this in over the coming three quarters. this takes the cet1 buffer to 360 basis points at the end of september and we also highlight that the remaining impact from the baltic ria increase is around 70 basis points in line with the communication at the time of the second quarter and we expect to phase this in over the coming three quarters That means that our buffers, in effect, on a pro forma basis stand at 290 basis points with the Baltic RIA fully phased in. that means that our buffers in effect on a pro forma basis stand at 290 basis points with the baltic ria fully phased in Other effects to bear in mind as we go into the end of the year is the impact from operational risk RIA in the fourth quarter when we do review that level. On the next slide, we summarize our capital and liquidity position at the end of the third quarter. Our capital as well as our liquidity measures have all strengthened during the quarter, reflected in a rising LCR from 130 to 136% and a higher NSFR from 112 to 116, and the CET1 ratio as we just discussed on the previous slide. Finally, I would like to conclude with our financial targets, which remain unchanged, including a 50% payout ratio, a management capital buffer target of 100 to 300 basis points above the regulatory minimum, and a return on equity competitive with peers with a long-term aspiration of 15%. Return on equity year to date stands at 14.1%. Other effects to bear in mind as we go into the end of the year is the impact from operational risk RIA in the fourth quarter when we do review that level. other effects to bear in mind as we go into the end of the year is the impact from operational risk ria in the fourth quarter when we do review that level On the next slide, we summarize our capital and liquidity position at the end of the third quarter. on the next slide we summarize our capital and liquidity position at the end of the third quarter Our capital as well as our liquidity measures have all strengthened during the quarter, reflected in a rising LCR from 130 to 136% and a higher NSFR from 112 to 116, and the CET1 ratio as we just discussed on the previous slide. our capital as well as our liquidity measures have all strengthened during the quarter reflected in a rising lcr from 130 to 136% and a higher nsfr from 112 to 116 and the cet1 ratio as we just discussed on the previous slide Finally, I would like to conclude with our financial targets, which remain unchanged, including a 50% payout ratio, a management capital buffer target of 100 to 300 basis points above the regulatory minimum, and a return on equity competitive with peers with a long-term aspiration of 15%. finally i would like to conclude with our financial targets which remain unchanged including a 50% payout ratio a management capital buffer target of 100 to 300 basis points above the regulatory minimum and a return on equity competitive with peers with a long-term aspiration of 15% Return on equity year to date stands at 14.1%. return on equity year to date stands at 14.1% With that, I hand the word back to you, Johan. With that, I hand the word back to you, Johan. with that i hand the word back to you johan

Speaker 4: Thank you, Christopher. That ends our prepared remarks, and I'll hand over to you, operator, for the Q&A. Thank you. Thank you, Christopher. thank you christopher That ends our prepared remarks, and I'll hand over to you, operator, for the Q&A. that ends our prepared remarks and i'll hand over to you operator for the q&a Thank you. thank you

Speaker 2: Thank you. As a reminder, to ask a question, please press 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1 1 again. Please stand by while we compile the Q&A process. We will now take the first question from the line of Namita Samtani from Barclays. Please go ahead. Thank you. thank you As a reminder, to ask a question, please press 1 1 on your telephone and wait for your name to be announced. as a reminder to ask a question please press 1 1 on your telephone and wait for your name to be announced To withdraw your question, please press 1 1 again. to withdraw your question please press 1 1 again Please stand by while we compile the Q&A process. please stand by while we compile the q&a process We will now take the first question from the line of Namita Samtani from Barclays. we will now take the first question from the line of namita samtani from barclays Please go ahead. please go ahead Morning, and thanks for taking my questions. My first question, what should we think of funding costs related to net interest income going forward? Because surely if rates are still coming down or they have come down, which is yet to be factored into our net interest income, this will continue to be a tailwind. Secondly, I just wonder, do you lend to private credit, and what percentage of that is part of your book? Thank you. Morning, and thanks for taking my questions. morning and thanks for taking my questions My first question, what should we think of funding costs related to net interest income going forward? my first question what should we think of funding costs related to net interest income going forward Because surely if rates are still coming down or they have come down, which is yet to be factored into our net interest income, this will continue to be a tailwind. because surely if rates are still coming down or they have come down which is yet to be factored into our net interest income this will continue to be a tailwind Secondly, I just wonder, do you lend to private credit, and what percentage of that is part of your book? secondly i just wonder do you lend to private credit and what percentage of that is part of your book Thank you. thank you Good morning, Namita. Thanks for your question, Christopher. I'll take your first question on the net interest income. You're right to say that we've had a positive effect from funding costs in the quarter, and you saw that also in the breakdown of the NII in Treasury. We estimate that effect to be positive for the quarter of around $100 million or so. Now, going forward, we'll continue to reiterate the message on three to six months lag from the last rate cut for the dynamics to work their way through the balance sheet before the net interest income would trough. We should expect the net interest income to come down again in the fourth quarter and then in the first quarter, and then we'll see again what happens to rates, of course, as we go into 2026. Those are broadly the effects that I would bear in mind. Good morning, Namita. good morning namita Thanks for your question, Christopher. thanks for your question christopher I'll take your first question on the net interest income. i'll take your first question on the net interest income You're right to say that we've had a positive effect from funding costs in the quarter, and you saw that also in the breakdown of the NII in Treasury. you're right to say that we've had a positive effect from funding costs in the quarter and you saw that also in the breakdown of the nii in treasury We estimate that effect to be positive for the quarter of around $100 million or so. we estimate that effect to be positive for the quarter of around $100 million or so Now, going forward, we'll continue to reiterate the message on three to six months lag from the last rate cut for the dynamics to work their way through the balance sheet before the net interest income would trough. now going forward we'll continue to reiterate the message on three to six months lag from the last rate cut for the dynamics to work their way through the balance sheet before the net interest income would trough We should expect the net interest income to come down again in the fourth quarter and then in the first quarter, and then we'll see again what happens to rates, of course, as we go into 2026. we should expect the net interest income to come down again in the fourth quarter and then in the first quarter and then we'll see again what happens to rates of course as we go into 2026 Those are broadly the effects that I would bear in mind. those are broadly the effects that i would bear in mind Johan, you want to comment on the private credit? Johan, you want to comment on the private credit? johan you want to comment on the private credit

Speaker 4: Thank you, Namita. We have no meaningful, noticeable exposure direct to any private credit. We do have a very, very small group of private equity firms that also have a private debt arm, but no direct exposure. It is so small that it's not really noticeable. Thank you, Namita. thank you namita We have no meaningful, noticeable exposure direct to any private credit. we have no meaningful noticeable exposure direct to any private credit We do have a very, very small group of private equity firms that also have a private debt arm, but no direct exposure. we do have a very very small group of private equity firms that also have a private debt arm but no direct exposure It is so small that it's not really noticeable. it is so small that it's not really noticeable Thank you. Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Magnus Andersson from ABG Sundal Collier. Please go ahead. Thank you. thank you We will now take the next question from the line of Magnus Andersson from ABG Sundal Collier. we will now take the next question from the line of magnus andersson from abg sundal collier Please go ahead. please go ahead Yes, good morning. Two questions, please. First of all, on corporate lending. Last quarter, you said you had an elevated level of activity-based lending, and it comes down a bit now quarter on quarter, FX-adjusted. Could you please tell us how you see the outlook for activity-based lending as transaction activities are now picking up now, and also what you think about the more lending for general purposes when you think that will pick up? That's the first question. Secondly, on capital and risk-weighted assets, the level was significantly lower than at least I thought in this quarter, and I see that your risk rate comes down in corporate IRB, for example. With the exception of the OPRES coming in into Q4, is there anything else here that could be volatile, or is this a reasonable run rate to use? Yes, good morning. yes good morning Two questions, please. two questions please First of all, on corporate lending. first of all on corporate lending Last quarter, you said you had an elevated level of activity-based lending, and it comes down a bit now quarter on quarter, FX-adjusted. last quarter you said you had an elevated level of activity-based lending and it comes down a bit now quarter on quarter fx-adjusted Could you please tell us how you see the outlook for activity-based lending as transaction activities are now picking up now, and also what you think about the more lending for general purposes when you think that will pick up? could you please tell us how you see the outlook for activity-based lending as transaction activities are now picking up now and also what you think about the more lending for general purposes when you think that will pick up That's the first question. that's the first question Secondly, on capital and risk-weighted assets, the level was significantly lower than at least I thought in this quarter, and I see that your risk rate comes down in corporate IRB, for example. secondly on capital and risk-weighted assets the level was significantly lower than at least i thought in this quarter and i see that your risk rate comes down in corporate irb for example With the exception of the OPRES coming in into Q4, is there anything else here that could be volatile, or is this a reasonable run rate to use? with the exception of the opres coming in into q4 is there anything else here that could be volatile or is this a reasonable run rate to use I think you even included 10 billion of the Article 3 announcement as well here. Related to capital, do you know already now if you will continue with the share buyback approval for the full year in the Q4 2025 report, or if you would consider doing it as you did previously with the half-year approvals? Thanks. I think you even included 10 billion of the Article 3 announcement as well here. i think you even included 10 billion of the article 3 announcement as well here Related to capital, do you know already now if you will continue with the share buyback approval for the full year in the Q4 2025 report, or if you would consider doing it as you did previously with the half-year approvals? related to capital do you know already now if you will continue with the share buyback approval for the full year in the q4 2025 report or if you would consider doing it as you did previously with the half-year approvals Thanks. thanks

Speaker 4: Thanks, Magnus. I'll start with the corporate lending. First, just note that you did accurately depict what we said and what happened last quarter. Those temporary elevated levels for transaction-based exposures have now fallen off. This quarter, with its 4% year-on-year, does not have those called temporary bridges on as there were very little transactions done into the summer. This is a much more steady as we go. When it looks going forward, the pipeline looks unusually strong. That doesn't mean that they naturally materialize for events and the event-driven lending that might come with it. We did see a pickup in investment banking and also capital markets transactions towards the later half of the third quarter, which is an encouraging sign. We, of course, always keep a close look as a leading indicator of what Americans do. You could see some similar signs or even more pronounced there. Thanks, Magnus. thanks magnus I'll start with the corporate lending. i'll start with the corporate lending First, just note that you did accurately depict what we said and what happened last quarter. first just note that you did accurately depict what we said and what happened last quarter Those temporary elevated levels for transaction-based exposures have now fallen off. those temporary elevated levels for transaction-based exposures have now fallen off This quarter, with its 4% year-on-year, does not have those called temporary bridges on as there were very little transactions done into the summer. this quarter with its 4% year-on-year does not have those called temporary bridges on as there were very little transactions done into the summer This is a much more steady as we go. this is a much more steady as we go When it looks going forward, the pipeline looks unusually strong. when it looks going forward the pipeline looks unusually strong That doesn't mean that they naturally materialize for events and the event-driven lending that might come with it. that doesn't mean that they naturally materialize for events and the event-driven lending that might come with it We did see a pickup in investment banking and also capital markets transactions towards the later half of the third quarter, which is an encouraging sign. we did see a pickup in investment banking and also capital markets transactions towards the later half of the third quarter which is an encouraging sign We, of course, always keep a close look as a leading indicator of what Americans do. we of course always keep a close look as a leading indicator of what americans do You could see some similar signs or even more pronounced there. you could see some similar signs or even more pronounced there I also want to say that the lending fees this quarter, even though it's a very, very quiet one, is still 24% up year to date. The lending fees, which is, of course, what you typically the majority of what you earn on these is not NII when it comes to transaction, is up 9% the first three quarters this year compared to last. There is some underlying event-driven momentum, but I still want to be cautious because a lot of things need to happen, and we don't want any of the risks that have been identified to materialize in Q3 that would create volatility. If I'm a little bit constructive and hopeful, I think general corporate purposes, that's a longer transition. We are not seeing this broad-based let's invest in increased capacity. I also want to say that the lending fees this quarter, even though it's a very, very quiet one, is still 24% up year to date. i also want to say that the lending fees this quarter even though it's a very very quiet one is still 24% up year to date The lending fees, which is, of course, what you typically the majority of what you earn on these is not NII when it comes to transaction, is up 9% the first three quarters this year compared to last. the lending fees which is of course what you typically the majority of what you earn on these is not nii when it comes to transaction is up 9% the first three quarters this year compared to last There is some underlying event-driven momentum, but I still want to be cautious because a lot of things need to happen, and we don't want any of the risks that have been identified to materialize in Q3 that would create volatility. there is some underlying event-driven momentum but i still want to be cautious because a lot of things need to happen and we don't want any of the risks that have been identified to materialize in q3 that would create volatility If I'm a little bit constructive and hopeful, I think general corporate purposes, that's a longer transition. if i'm a little bit constructive and hopeful i think general corporate purposes that's a longer transition We are not seeing this broad-based let's invest in increased capacity. we are not seeing this broad-based let's invest in increased capacity You need to borrow to invest further because the first investments, they're always done with your operational capital or cash at hand to meet the demand. In my mind, I often come back in this discussion around the lack of demand in the economy, retail sales, and consumption in GDP. That's kind of the last leg that we are looking for really to change the picture. Of course, looking at the economists, they are looking pretty constructive for 2026 and 2027 on this topic, but let's wait and see. Malmer? You need to borrow to invest further because the first investments, they're always done with your operational capital or cash at hand to meet the demand. you need to borrow to invest further because the first investments they're always done with your operational capital or cash at hand to meet the demand In my mind, I often come back in this discussion around the lack of demand in the economy, retail sales, and consumption in GDP. in my mind i often come back in this discussion around the lack of demand in the economy retail sales and consumption in gdp That's kind of the last leg that we are looking for really to change the picture. that's kind of the last leg that we are looking for really to change the picture Of course, looking at the economists, they are looking pretty constructive for 2026 and 2027 on this topic, but let's wait and see. of course looking at the economists they are looking pretty constructive for 2026 and 2027 on this topic but let's wait and see Malmer? malmer

Speaker 8: Thank you. Magnus, on the RWA, if we look into the fourth quarter, you're right that we expect the OPRES effect. We estimate that to around 15 basis points negative impact. The other moving parts that are subject to movements during any quarter is the FX effect, of course. You see that it's positive in the quarter. That remains, of course, unknown. It's the RWA size, which in this quarter is, again, positive contribution. Coming to your previous question, I hope that we will see that moving in the other direction. The third one is RWA asset quality, which again in this quarter due to upgrades of risk classes of a number of counterparts also contributed positively. These are the moving parts, and then you got the OPRES RWA. Thank you. thank you Magnus, on the RWA, if we look into the fourth quarter, you're right that we expect the OPRES effect. magnus on the rwa if we look into the fourth quarter you're right that we expect the opres effect We estimate that to around 15 basis points negative impact. we estimate that to around 15 basis points negative impact The other moving parts that are subject to movements during any quarter is the FX effect, of course. the other moving parts that are subject to movements during any quarter is the fx effect of course You see that it's positive in the quarter. you see that it's positive in the quarter That remains, of course, unknown. that remains of course unknown It's the RWA size, which in this quarter is, again, positive contribution. it's the rwa size which in this quarter is again positive contribution Coming to your previous question, I hope that we will see that moving in the other direction. coming to your previous question i hope that we will see that moving in the other direction The third one is RWA asset quality, which again in this quarter due to upgrades of risk classes of a number of counterparts also contributed positively. the third one is rwa asset quality which again in this quarter due to upgrades of risk classes of a number of counterparts also contributed positively These are the moving parts, and then you got the OPRES RWA. these are the moving parts and then you got the opres rwa When it comes to the buffer, the 360 basis points, and we look at the pro forma effectively the 290, assuming the remaining phasing of the Baltic RWA. Last year, at this point, we were around 470 basis points. The situation was very different, but still there are, to your question, a number of moving parts in the area that will play out in the fourth quarter. I will come back at that time with comments on future buybacks. When it comes to the buffer, the 360 basis points, and we look at the pro forma effectively the 290, assuming the remaining phasing of the Baltic RWA. when it comes to the buffer the 360 basis points and we look at the pro forma effectively the 290 assuming the remaining phasing of the baltic rwa Last year, at this point, we were around 470 basis points. last year at this point we were around 470 basis points The situation was very different, but still there are, to your question, a number of moving parts in the area that will play out in the fourth quarter. the situation was very different but still there are to your question a number of moving parts in the area that will play out in the fourth quarter I will come back at that time with comments on future buybacks. i will come back at that time with comments on future buybacks

Speaker 4: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Markus Sandgren from Kepler Cheuvreux. Please go ahead. Thank you. thank you We will now take the next question from the line of Markus Sandgren from Kepler Cheuvreux. we will now take the next question from the line of markus sandgren from kepler cheuvreux Please go ahead. please go ahead Good morning. I was thinking about there is some growth in the Baltic lending business. I was thinking your ambitions going forward, do you expect to grow in line with the market given your size, or is there any reason to believe that you can capture more market shares there? Good morning. good morning I was thinking about there is some growth in the Baltic lending business. i was thinking about there is some growth in the baltic lending business I was thinking your ambitions going forward, do you expect to grow in line with the market given your size, or is there any reason to believe that you can capture more market shares there? i was thinking your ambitions going forward do you expect to grow in line with the market given your size or is there any reason to believe that you can capture more market shares there

Speaker 4: Okay. Yes, we are growing clearly higher, and it's not only this quarter. It's been going on for a while, so we are actually accelerating a bit. We're now looking at 8% to 9% growth in this quarter year-on-year compared to, if I remember correctly, it was about 6% last quarter. We are maintaining our market share as well. The long-term picture is that it's quite concentrated, as you probably know, to two large institutions, Swedish banks in the Baltics. There has been, of course, increased demand for higher competition from everyone in the marketplace. Right now, we have an ambition to maintain this position. I wouldn't commit as it is a very high market share we start with. This is a little bit defend and protect, but we are not going to give it up easily. Be careful in increasing market share, but definitely, it's a fast-growing market. Okay. okay Yes, we are growing clearly higher, and it's not only this quarter. yes we are growing clearly higher and it's not only this quarter It's been going on for a while, so we are actually accelerating a bit. it's been going on for a while so we are actually accelerating a bit We're now looking at 8% to 9% growth in this quarter year-on-year compared to, if I remember correctly, it was about 6% last quarter. we're now looking at 8% to 9% growth in this quarter year-on-year compared to if i remember correctly it was about 6% last quarter We are maintaining our market share as well. we are maintaining our market share as well The long-term picture is that it's quite concentrated, as you probably know, to two large institutions, Swedish banks in the Baltics. the long-term picture is that it's quite concentrated as you probably know to two large institutions swedish banks in the baltics There has been, of course, increased demand for higher competition from everyone in the marketplace. there has been of course increased demand for higher competition from everyone in the marketplace Right now, we have an ambition to maintain this position. right now we have an ambition to maintain this position I wouldn't commit as it is a very high market share we start with. i wouldn't commit as it is a very high market share we start with This is a little bit defend and protect, but we are not going to give it up easily. this is a little bit defend and protect but we are not going to give it up easily Be careful in increasing market share, but definitely, it's a fast-growing market. be careful in increasing market share but definitely it's a fast-growing market I also like to point out that it is a higher inflationary market. In real terms, it is not as impressive as these headline numbers are, and you need to also take that into account because the loan book, unless you re-lever the economy, will grow with nominal inflation plus whatever you do. I also like to point out that it is a higher inflationary market. i also like to point out that it is a higher inflationary market In real terms, it is not as impressive as these headline numbers are, and you need to also take that into account because the loan book, unless you re-lever the economy, will grow with nominal inflation plus whatever you do. in real terms it is not as impressive as these headline numbers are and you need to also take that into account because the loan book unless you re-lever the economy will grow with nominal inflation plus whatever you do Okay. Thanks. Okay. okay Thanks. thanks

Speaker 2: Thank you. We will now take the next question from the line of Martin Eksted from Handelsbanken. Please go ahead. Thank you. thank you We will now take the next question from the line of Martin Eksted from Handelsbanken. we will now take the next question from the line of martin eksted from handelsbanken Please go ahead. please go ahead Thank you. Can you hear me? Thank you. thank you Can you hear me? can you hear me

Speaker 4: I hear you well. I hear you well. i hear you well Excellent. Thank you. I wanted to focus a bit on your retail business. Looking at Statistics Sweden data on mortgage lending, during the first half of 2025, you saw quite strong market shares of net new lending. I think you took like 16% on the new lending against the backbook market share of 13%. As we entered the second half of the year, this trend kind of evaporated, and you took just 1% in July and 3% in August, despite similar volumes in the market overall. Is there a story behind this that you could share with us perhaps? Secondly, on that same topic, with Sven Eggefalk now joining you as a new Head of the Business Line, should we keep hopes up for higher volumes of market shares to return? Excellent. excellent Thank you. thank you I wanted to focus a bit on your retail business. i wanted to focus a bit on your retail business Looking at Statistics Sweden data on mortgage lending, during the first half of 2025, you saw quite strong market shares of net new lending. looking at statistics sweden data on mortgage lending during the first half of 2025 you saw quite strong market shares of net new lending I think you took like 16% on the new lending against the backbook market share of 13%. i think you took like 16% on the new lending against the backbook market share of 13% As we entered the second half of the year, this trend kind of evaporated, and you took just 1% in July and 3% in August, despite similar volumes in the market overall. as we entered the second half of the year this trend kind of evaporated and you took just 1% in july and 3% in august despite similar volumes in the market overall Is there a story behind this that you could share with us perhaps? is there a story behind this that you could share with us perhaps Secondly, on that same topic, with Sven Eggefalk now joining you as a new Head of the Business Line, should we keep hopes up for higher volumes of market shares to return? secondly on that same topic with sven eggefalk now joining you as a new head of the business line should we keep hopes up for higher volumes of market shares to return

Speaker 8: Good morning, Christopher. I can comment on this. I think, as I mentioned in the remarks, if we look at our market share year to date in net sales of mortgages, that stands around 13%, and that is in line with our historical stock level. There is, as you point to, some movement between the quarters. I think when I look at the focus that we have for winning the mortgage market share business, we think of three components. It's the speed, it's the availability, and it's the pricing. It's about us continuously evaluating and making sure that we are competitive along all those three. As you will see, we haven't moved pricing much in the last quarter, but we're continuously working around speed and availability. I would also mention that there is a volume effect into this as well. Good morning, Christopher. good morning christopher I can comment on this. i can comment on this I think, as I mentioned in the remarks, if we look at our market share year to date in net sales of mortgages, that stands around 13%, and that is in line with our historical stock level. i think as i mentioned in the remarks if we look at our market share year to date in net sales of mortgages that stands around 13% and that is in line with our historical stock level There is, as you point to, some movement between the quarters. there is as you point to some movement between the quarters I think when I look at the focus that we have for winning the mortgage market share business, we think of three components. i think when i look at the focus that we have for winning the mortgage market share business we think of three components It's the speed, it's the availability, and it's the pricing. it's the speed it's the availability and it's the pricing It's about us continuously evaluating and making sure that we are competitive along all those three. it's about us continuously evaluating and making sure that we are competitive along all those three As you will see, we haven't moved pricing much in the last quarter, but we're continuously working around speed and availability. as you will see we haven't moved pricing much in the last quarter but we're continuously working around speed and availability I would also mention that there is a volume effect into this as well. i would also mention that there is a volume effect into this as well Volumes are still relatively small, which can impact movements in between individual quarters. Year to date, broadly in line with the stock market share. Volumes are still relatively small, which can impact movements in between individual quarters. volumes are still relatively small which can impact movements in between individual quarters Year to date, broadly in line with the stock market share. year to date broadly in line with the stock market share Okay. Understood. A second question, if I may. Just picking up on Namita's earlier question on private credit, I wanted to pose this question to you a bit more broadly. The main focus around the private credit discussion has been centered on the U.S., right? You said you don't do this yourselves currently to any large extent. Generally, you stand perhaps as the leading Swedish lender to non-bank financial institutions. I just wanted to check with you for a Swedish take on this. How widespread is this concept in Sweden? What are your views on the viability of the model in Sweden? Also, a bit on the risks, perhaps. If you don't do this, who should be doing it, or shouldn't we be doing it at all in Sweden, and why not? Okay. okay Understood. understood A second question, if I may. a second question if i may Just picking up on Namita's earlier question on private credit, I wanted to pose this question to you a bit more broadly. just picking up on namita's earlier question on private credit i wanted to pose this question to you a bit more broadly The main focus around the private credit discussion has been centered on the U.S., right? the main focus around the private credit discussion has been centered on the u.s right You said you don't do this yourselves currently to any large extent. you said you don't do this yourselves currently to any large extent Generally, you stand perhaps as the leading Swedish lender to non-bank financial institutions. generally you stand perhaps as the leading swedish lender to non-bank financial institutions I just wanted to check with you for a Swedish take on this. i just wanted to check with you for a swedish take on this How widespread is this concept in Sweden? how widespread is this concept in sweden What are your views on the viability of the model in Sweden? what are your views on the viability of the model in sweden Also, a bit on the risks, perhaps. also a bit on the risks perhaps If you don't do this, who should be doing it, or shouldn't we be doing it at all in Sweden, and why not? if you don't do this who should be doing it or shouldn't we be doing it at all in sweden and why not

Speaker 4: Okay. This is a little bit of reasoning. Don't take this as facts. First of all, this has been a development very much driven by the U.S. I hear numbers like $2,000 billion U.S. dollars. It's actually surpassing bank lending if you extrapolate the current trends. It is a very, very significant deep source of debt capital for the American economy. Europe is much, much smaller as a whole. Even the things that are growing fast in Europe are typically more American firms replicating what they've done in the U.S. rather than European firms. You go to the Nordics, it's even more pronounced. Private debt is not a large funding source for the Nordics where we operate. Okay. okay This is a little bit of reasoning. this is a little bit of reasoning Don't take this as facts. don't take this as facts First of all, this has been a development very much driven by the U.S. first of all this has been a development very much driven by the u.s I hear numbers like $2,000 billion U.S. dollars. i hear numbers like $2,000 billion u.s dollars It's actually surpassing bank lending if you extrapolate the current trends. it's actually surpassing bank lending if you extrapolate the current trends It is a very, very significant deep source of debt capital for the American economy. it is a very very significant deep source of debt capital for the american economy Europe is much, much smaller as a whole. europe is much much smaller as a whole Even the things that are growing fast in Europe are typically more American firms replicating what they've done in the U.S. rather than European firms. even the things that are growing fast in europe are typically more american firms replicating what they've done in the u.s rather than european firms You go to the Nordics, it's even more pronounced. you go to the nordics it's even more pronounced Private debt is not a large funding source for the Nordics where we operate. private debt is not a large funding source for the nordics where we operate This is, of course, very much if you look at the classic private debt, private equity firms of Scandinavia, which is our home market, that it looks very, very different in terms of the balance between equities, infrastructure, alternatives versus private debt lending. My take on this is that first, the leverage buyout market is very well functioning in Nordics. This means that there's much less of a free lunch to be had sourcing the money that you then refund and redeploy into a leverage buyout type of financing because this is almost like a game between the two different products. They are slightly different, but they achieve the same thing for a private equity firm. This is, of course, very much if you look at the classic private debt, private equity firms of Scandinavia, which is our home market, that it looks very, very different in terms of the balance between equities, infrastructure, alternatives versus private debt lending. this is of course very much if you look at the classic private debt private equity firms of scandinavia which is our home market that it looks very very different in terms of the balance between equities infrastructure alternatives versus private debt lending My take on this is that first, the leverage buyout market is very well functioning in Nordics. my take on this is that first the leverage buyout market is very well functioning in nordics This means that there's much less of a free lunch to be had sourcing the money that you then refund and redeploy into a leverage buyout type of financing because this is almost like a game between the two different products. this means that there's much less of a free lunch to be had sourcing the money that you then refund and redeploy into a leverage buyout type of financing because this is almost like a game between the two different products They are slightly different, but they achieve the same thing for a private equity firm. they are slightly different but they achieve the same thing for a private equity firm One is you borrow from a private debt with typically 7% to 9% yield expectations, or you borrow from a bank, which in the Nordics, we're very efficient, and we've been able to price the LBOs quite differently. If you look at the overall market of LBOs, how they're financed, it's clearly in favor of private debt funds. From the banking system, as far as I know, Nordic has very little exposure in the Nordic banks to this. It's other capital providers that have put the money in. One is you borrow from a private debt with typically 7% to 9% yield expectations, or you borrow from a bank, which in the Nordics, we're very efficient, and we've been able to price the LBOs quite differently. one is you borrow from a private debt with typically 7% to 9% yield expectations or you borrow from a bank which in the nordics we're very efficient and we've been able to price the lbos quite differently If you look at the overall market of LBOs, how they're financed, it's clearly in favor of private debt funds. if you look at the overall market of lbos how they're financed it's clearly in favor of private debt funds From the banking system, as far as I know, Nordic has very little exposure in the Nordic banks to this. from the banking system as far as i know nordic has very little exposure in the nordic banks to this It's other capital providers that have put the money in. it's other capital providers that have put the money in Okay. Great answer. Thank you. Okay. okay Great answer. great answer Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Sreja Stava from Citi. Please go ahead. Thank you. thank you We will now take the next question from the line of Sreja Stava from Citi. we will now take the next question from the line of sreja stava from citi Please go ahead. please go ahead Hi, and thank you for taking my questions. My first one is your comments around the pickup towards the end of the quarter in capital markets activity. This quarter was affected somewhat by lower episodic transactions than you'd expect. I just want to talk about what the pipeline looks like for the fourth quarter, what you've already seen in the fourth quarter, and going forward, please. My second question is going back to your comments on the scope for accelerating the implementation of AirPlus. You've previously, if I'm not mistaken, commented qualitatively about when you expect it to be accretive, excluding, and including restructuring costs. Is there anything further you can now provide on that, given you've obviously had an extra quarter seeing the business and integrating it? Thanks. Hi, and thank you for taking my questions. hi and thank you for taking my questions My first one is your comments around the pickup towards the end of the quarter in capital markets activity. my first one is your comments around the pickup towards the end of the quarter in capital markets activity This quarter was affected somewhat by lower episodic transactions than you'd expect. this quarter was affected somewhat by lower episodic transactions than you'd expect I just want to talk about what the pipeline looks like for the fourth quarter, what you've already seen in the fourth quarter, and going forward, please. i just want to talk about what the pipeline looks like for the fourth quarter what you've already seen in the fourth quarter and going forward please My second question is going back to your comments on the scope for accelerating the implementation of AirPlus. my second question is going back to your comments on the scope for accelerating the implementation of airplus You've previously, if I'm not mistaken, commented qualitatively about when you expect it to be accretive, excluding, and including restructuring costs. you've previously if i'm not mistaken commented qualitatively about when you expect it to be accretive excluding and including restructuring costs Is there anything further you can now provide on that, given you've obviously had an extra quarter seeing the business and integrating it? is there anything further you can now provide on that given you've obviously had an extra quarter seeing the business and integrating it Thanks. thanks

Speaker 4: Sure. I'll start with the pickup. The circumstances around capital markets and primary deals and M&A and IPOs, it's very, I would argue, benign. It's a good market. Markets are strong. They're not over. You know, they might be an all-time high on the stock market, all-time tights on credit markets, recent tights in credit markets, lower interest rates, and a little bit of European spurring optimism for what is going to come. It's not particularly strong here and now, but it's definitely more optimism around where Europe could go, not at least in Scandinavia and the Baltics if you look at GDP projection, consumption, etc. I would argue that Germany has had the biggest delta from one year ago where they were very much not in favor. Sure. sure I'll start with the pickup. i'll start with the pickup The circumstances around capital markets and primary deals and M&A and IPOs, it's very, I would argue, benign. the circumstances around capital markets and primary deals and m&a and ipos it's very i would argue benign It's a good market. it's a good market Markets are strong. markets are strong They're not over. they're not over You know, they might be an all-time high on the stock market, all-time tights on credit markets, recent tights in credit markets, lower interest rates, and a little bit of European spurring optimism for what is going to come. you know they might be an all-time high on the stock market all-time tights on credit markets recent tights in credit markets lower interest rates and a little bit of european spurring optimism for what is going to come It's not particularly strong here and now, but it's definitely more optimism around where Europe could go, not at least in Scandinavia and the Baltics if you look at GDP projection, consumption, etc. I would argue that Germany has had the biggest delta from one year ago where they were very much not in favor. it's not particularly strong here and now but it's definitely more optimism around where europe could go not at least in scandinavia and the baltics if you look at gdp projection consumption etc i would argue that germany has had the biggest delta from one year ago where they were very much not in favor Now it's a little bit of, let's say, interest at least on what could Germany do with all these announcements around fiscal stimulus, defense security, and resilience. The uptick is exactly what we would have expected. We've actually been a little bit disappointed, I would say, if you compare a year and a half ago when we saw that the interest rate has peaked and we had a very quiet couple of years behind us after the record years of the early 2000s and 2020s. Now it looks quite constructive. You saw that before summer, we did an unusually amount of large deals in the Nordics. Of course, summer dies. I would say that the pipeline and the amount of discussions for the fall and next year still indicates that there is a higher level of potential than there was before. Now it's a little bit of, let's say, interest at least on what could Germany do with all these announcements around fiscal stimulus, defense security, and resilience. now it's a little bit of let's say interest at least on what could germany do with all these announcements around fiscal stimulus defense security and resilience The uptick is exactly what we would have expected. the uptick is exactly what we would have expected We've actually been a little bit disappointed, I would say, if you compare a year and a half ago when we saw that the interest rate has peaked and we had a very quiet couple of years behind us after the record years of the early 2000s and 2020s. we've actually been a little bit disappointed i would say if you compare a year and a half ago when we saw that the interest rate has peaked and we had a very quiet couple of years behind us after the record years of the early 2000s and 2020s Now it looks quite constructive. now it looks quite constructive You saw that before summer, we did an unusually amount of large deals in the Nordics. you saw that before summer we did an unusually amount of large deals in the nordics Of course, summer dies. of course summer dies I would say that the pipeline and the amount of discussions for the fall and next year still indicates that there is a higher level of potential than there was before. i would say that the pipeline and the amount of discussions for the fall and next year still indicates that there is a higher level of potential than there was before Do not take that too much, but I'll just look at issuance of securities and secondary market derivatives, which is, of course, it's cutting in the financial result today. We're up 29% year to date compared to last year on issuance and securities and services, M&A and equities. We have 14% in secondary markets year to date. There is something clearly better already happening compared to last year. We are just saying that we feel quite constructive. We're not saying that this seems there are no indications right now that this would implode tomorrow, rather being quite supportive of this could probably continue. Do not take that too much, but I'll just look at issuance of securities and secondary market derivatives, which is, of course, it's cutting in the financial result today. do not take that too much but i'll just look at issuance of securities and secondary market derivatives which is of course it's cutting in the financial result today We're up 29% year to date compared to last year on issuance and securities and services, M&A and equities. we're up 29% year to date compared to last year on issuance and securities and services m&a and equities We have 14% in secondary markets year to date. we have 14% in secondary markets year to date There is something clearly better already happening compared to last year. there is something clearly better already happening compared to last year We are just saying that we feel quite constructive. we are just saying that we feel quite constructive We're not saying that this seems there are no indications right now that this would implode tomorrow, rather being quite supportive of this could probably continue. we're not saying that this seems there are no indications right now that this would implode tomorrow rather being quite supportive of this could probably continue

Speaker 8: On your second question around AirPlus, a reminder of where we are there. As we highlighted in the second quarter, the first critical milestones around IT migration, the discontinuation of non-core markets, and the right-sizing in the organization have been completed, and this process is on track. The next phase now is to increase the pace of implementation between AirPlus and the rest of the SEB core business. What we are now reviewing is if there are reasons to try and accelerate that phase. As you will remember, we gave a range around the cost target for 2025 of plus minus $300 million, as we said, largely attributable to the pace of implementation of AirPlus. It was in that context I made those comments. On your second question around AirPlus, a reminder of where we are there. on your second question around airplus a reminder of where we are there As we highlighted in the second quarter, the first critical milestones around IT migration, the discontinuation of non-core markets, and the right-sizing in the organization have been completed, and this process is on track. as we highlighted in the second quarter the first critical milestones around it migration the discontinuation of non-core markets and the right-sizing in the organization have been completed and this process is on track The next phase now is to increase the pace of implementation between AirPlus and the rest of the SEB core business. the next phase now is to increase the pace of implementation between airplus and the rest of the seb core business What we are now reviewing is if there are reasons to try and accelerate that phase. what we are now reviewing is if there are reasons to try and accelerate that phase As you will remember, we gave a range around the cost target for 2025 of plus minus $300 million, as we said, largely attributable to the pace of implementation of AirPlus. as you will remember we gave a range around the cost target for 2025 of plus minus $300 million as we said largely attributable to the pace of implementation of airplus It was in that context I made those comments. it was in that context i made those comments Thank you very much. Thank you very much. thank you very much

Speaker 2: Thank you. We will now take the next question from the line of Johan Ekbloem from UBS. Please go ahead. Thank you. thank you We will now take the next question from the line of Johan Ekbloem from UBS. we will now take the next question from the line of johan ekbloem from ubs Please go ahead. please go ahead Thank you. Just to come back on some of the comments you made earlier around AI, I guess, you know, trying to figure out what AI could mean for your business longer term, there's two aspects to it, I guess, that I'm interested in. One is how do you think about the cost of AI? We hear a lot of stories about the cost of AI being heavily discounted today and that we should expect costs to increase materially as you get onto kind of normal rate cards for what you're paying. When do you expect to see concrete benefits in terms of efficiency or revenue opportunities that will be kind of obviously visible in the financials? That would be the first question. Secondly, just a bit of a detailed one on asset quality. Thank you. thank you Just to come back on some of the comments you made earlier around AI, I guess, you know, trying to figure out what AI could mean for your business longer term, there's two aspects to it, I guess, that I'm interested in. just to come back on some of the comments you made earlier around ai i guess you know trying to figure out what ai could mean for your business longer term there's two aspects to it i guess that i'm interested in One is how do you think about the cost of AI? one is how do you think about the cost of ai We hear a lot of stories about the cost of AI being heavily discounted today and that we should expect costs to increase materially as you get onto kind of normal rate cards for what you're paying. we hear a lot of stories about the cost of ai being heavily discounted today and that we should expect costs to increase materially as you get onto kind of normal rate cards for what you're paying When do you expect to see concrete benefits in terms of efficiency or revenue opportunities that will be kind of obviously visible in the financials? when do you expect to see concrete benefits in terms of efficiency or revenue opportunities that will be kind of obviously visible in the financials That would be the first question. that would be the first question Secondly, just a bit of a detailed one on asset quality. secondly just a bit of a detailed one on asset quality I mean, we had a big green project that went belly up in Sweden earlier this year, and there's another one that's in the press now. Your corporate loan book tends to be very much focused on investment grade. How do you view these potentially higher credit risk projects, and how do you manage risk around those? I realize you probably can't comment on individual exposures, but just from a more kind of top-down view. I mean, we had a big green project that went belly up in Sweden earlier this year, and there's another one that's in the press now. i mean we had a big green project that went belly up in sweden earlier this year and there's another one that's in the press now Your corporate loan book tends to be very much focused on investment grade. your corporate loan book tends to be very much focused on investment grade How do you view these potentially higher credit risk projects, and how do you manage risk around those? how do you view these potentially higher credit risk projects and how do you manage risk around those I realize you probably can't comment on individual exposures, but just from a more kind of top-down view. i realize you probably can't comment on individual exposures but just from a more kind of top-down view

Speaker 4: Okay. If I start with this last, and on the hand, I think you asked mostly for the financial impact. I'll ask Christopher to reason around that on AI. The traditional loan book is investment grade. The really minimum rule of thumb is that you have to have three years of good cash flow that is proven, resilient business model, etc. That's what we do. There are, of course, also a very, very small part of the balance sheet that also gets dedicated to starting up of firms. The ones you mentioned, the larger green ones, they have been unusually very unique that they are of that magnitude. Okay. okay If I start with this last, and on the hand, I think you asked mostly for the financial impact. if i start with this last and on the hand i think you asked mostly for the financial impact I'll ask Christopher to reason around that on AI. i'll ask christopher to reason around that on ai The traditional loan book is investment grade. the traditional loan book is investment grade The really minimum rule of thumb is that you have to have three years of good cash flow that is proven, resilient business model, etc. That's what we do. the really minimum rule of thumb is that you have to have three years of good cash flow that is proven resilient business model etc that's what we do There are, of course, also a very, very small part of the balance sheet that also gets dedicated to starting up of firms. there are of course also a very very small part of the balance sheet that also gets dedicated to starting up of firms The ones you mentioned, the larger green ones, they have been unusually very unique that they are of that magnitude. the ones you mentioned the larger green ones they have been unusually very unique that they are of that magnitude We have had very, very modest, if I say it that way, exposure that you won't really have seen, even though there has been a little bit of actually blowouts in the whole green and clean tech sector as we speak, and it's continuing. The other thing is to see that the capital stack of all these projects, if they're large, are very different from the past. They are namely predominantly government guaranteed, and there are risk and offsets. The nominal values often, if not always, exaggerate heavily what the banks actually are exposed to. There are two mitigating factors to any worry, and that is that the amount is very small, and it's often guaranteed somewhere between 60% to 85% by a government. We have had very, very modest, if I say it that way, exposure that you won't really have seen, even though there has been a little bit of actually blowouts in the whole green and clean tech sector as we speak, and it's continuing. we have had very very modest if i say it that way exposure that you won't really have seen even though there has been a little bit of actually blowouts in the whole green and clean tech sector as we speak and it's continuing The other thing is to see that the capital stack of all these projects, if they're large, are very different from the past. the other thing is to see that the capital stack of all these projects if they're large are very different from the past They are namely predominantly government guaranteed, and there are risk and offsets. they are namely predominantly government guaranteed and there are risk and offsets The nominal values often, if not always, exaggerate heavily what the banks actually are exposed to. the nominal values often if not always exaggerate heavily what the banks actually are exposed to There are two mitigating factors to any worry, and that is that the amount is very small, and it's often guaranteed somewhere between 60% to 85% by a government. there are two mitigating factors to any worry and that is that the amount is very small and it's often guaranteed somewhere between 60% to 85% by a government

Speaker 8: If I reason a little bit around the AI and the financial impact, and you're right that we are at an early stage, trying to assess and quantify the ultimate impact is still difficult. I'll make a few comments. I think in terms of the benefits that we can already see, there are certainly some areas where we do see tangible efficiency gains and productivity enhancements. One is in software development, where we see the use of copilots increasing developer productivity and outputs and deploys. Another area is in wealth and asset management, where we can see an increase in the number of outbound customer calls as a result of AI supporting documentation. We see those productivity gains. How does that translate into P&L? If I reason a little bit around the AI and the financial impact, and you're right that we are at an early stage, trying to assess and quantify the ultimate impact is still difficult. if i reason a little bit around the ai and the financial impact and you're right that we are at an early stage trying to assess and quantify the ultimate impact is still difficult I'll make a few comments. i'll make a few comments I think in terms of the benefits that we can already see, there are certainly some areas where we do see tangible efficiency gains and productivity enhancements. i think in terms of the benefits that we can already see there are certainly some areas where we do see tangible efficiency gains and productivity enhancements One is in software development, where we see the use of copilots increasing developer productivity and outputs and deploys. one is in software development where we see the use of copilots increasing developer productivity and outputs and deploys Another area is in wealth and asset management, where we can see an increase in the number of outbound customer calls as a result of AI supporting documentation. another area is in wealth and asset management where we can see an increase in the number of outbound customer calls as a result of ai supporting documentation We see those productivity gains. we see those productivity gains How does that translate into P&L? how does that translate into p&l One of the comments that we made around the hiring calls that we're having is to consistently ask the question when we do replacement hires if there is a technology or an AI solution that could be levered for that same activity. We will see this gradually coming through. In terms of the cost of the actual AI, one of the reasons we decided to team up with a couple of other companies in the Wallenberg's sphere to invest in the compute power from Nvidia here in Sweden is partly to get access to sovereign access to compute, but also to ensure the cost. To your point, buying compute power from the large compute providers around the world is, of course, an exposure that anyone would have if you want to grow and expand in AI. One of the comments that we made around the hiring calls that we're having is to consistently ask the question when we do replacement hires if there is a technology or an AI solution that could be levered for that same activity. one of the comments that we made around the hiring calls that we're having is to consistently ask the question when we do replacement hires if there is a technology or an ai solution that could be levered for that same activity We will see this gradually coming through. we will see this gradually coming through In terms of the cost of the actual AI, one of the reasons we decided to team up with a couple of other companies in the Wallenberg's sphere to invest in the compute power from Nvidia here in Sweden is partly to get access to sovereign access to compute, but also to ensure the cost. in terms of the cost of the actual ai one of the reasons we decided to team up with a couple of other companies in the wallenberg's sphere to invest in the compute power from nvidia here in sweden is partly to get access to sovereign access to compute but also to ensure the cost To your point, buying compute power from the large compute providers around the world is, of course, an exposure that anyone would have if you want to grow and expand in AI. to your point buying compute power from the large compute providers around the world is of course an exposure that anyone would have if you want to grow and expand in ai That is also, for us, a level of comfort to have that cost under our own control. Those are some comments, but as you point out, it is still early days, and we are following it very closely, and the early signs that we're seeing are constructive productivity enhancements. That is also, for us, a level of comfort to have that cost under our own control. that is also for us a level of comfort to have that cost under our own control Those are some comments, but as you point out, it is still early days, and we are following it very closely, and the early signs that we're seeing are constructive productivity enhancements. those are some comments but as you point out it is still early days and we are following it very closely and the early signs that we're seeing are constructive productivity enhancements

Speaker 4: Thank you. Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Sophie Peterson from Goldman Sachs. Please go ahead. Thank you. thank you We will now take the next question from the line of Sophie Peterson from Goldman Sachs. we will now take the next question from the line of sophie peterson from goldman sachs Please go ahead. please go ahead Yeah, hi. This is Sophie from Goldman Sachs. Thanks a lot for taking my question. My first question would be on the fee line. The kind of softness that we saw in fees this quarter, was that reflecting margin pressure, or was it just less volumes than expected? If you could just discuss a little bit margin pressure compared to the volumes on the fee side. My second question would be around capital. What we are seeing is that the fiscal outlook or fiscal spending next year is quite good for Sweden. A macro outlook is improving. Should loan growth pick up for SEB? How do you think about prioritizing growth over shareholder returns, and what takes priority if you look at growth versus dividends versus share buybacks versus any potential M&A? Thank you. Yeah, hi. yeah hi This is Sophie from Goldman Sachs. this is sophie from goldman sachs Thanks a lot for taking my question. thanks a lot for taking my question My first question would be on the fee line. my first question would be on the fee line The kind of softness that we saw in fees this quarter, was that reflecting margin pressure, or was it just less volumes than expected? the kind of softness that we saw in fees this quarter was that reflecting margin pressure or was it just less volumes than expected If you could just discuss a little bit margin pressure compared to the volumes on the fee side. if you could just discuss a little bit margin pressure compared to the volumes on the fee side My second question would be around capital. my second question would be around capital What we are seeing is that the fiscal outlook or fiscal spending next year is quite good for Sweden. what we are seeing is that the fiscal outlook or fiscal spending next year is quite good for sweden A macro outlook is improving. a macro outlook is improving Should loan growth pick up for SEB? should loan growth pick up for seb How do you think about prioritizing growth over shareholder returns, and what takes priority if you look at growth versus dividends versus share buybacks versus any potential M&A? how do you think about prioritizing growth over shareholder returns and what takes priority if you look at growth versus dividends versus share buybacks versus any potential m&a Thank you. thank you

Speaker 8: Thank you. Thank you, Sophie. If I start with the fees, the sequential development there is really in three areas where we see this. First, within CIB, and as Johan alluded to a little bit, even though activity level is benign in the third quarter, it was very strong in the second quarter. You see the drop in fees and commissions sequentially of about SEK 400 million, being partly attributable to activity levels and fees in CIB. The second component you'll see is card fees in BRB, particularly on the corporate side. As you know, we are in our BRB card business more exposed to corporate activity than private activity. That being slower during the summer month is a second explanation. The positive effect and partly offsetting this is an increase in fees and commissions on AUM-related fees in wealth and asset management. Thank you. thank you Thank you, Sophie. thank you sophie If I start with the fees, the sequential development there is really in three areas where we see this. if i start with the fees the sequential development there is really in three areas where we see this First, within CIB, and as Johan alluded to a little bit, even though activity level is benign in the third quarter, it was very strong in the second quarter. first within cib and as johan alluded to a little bit even though activity level is benign in the third quarter it was very strong in the second quarter You see the drop in fees and commissions sequentially of about SEK 400 million, being partly attributable to activity levels and fees in CIB. you see the drop in fees and commissions sequentially of about sek 400 million being partly attributable to activity levels and fees in cib The second component you'll see is card fees in BRB, particularly on the corporate side. the second component you'll see is card fees in brb particularly on the corporate side As you know, we are in our BRB card business more exposed to corporate activity than private activity. as you know we are in our brb card business more exposed to corporate activity than private activity That being slower during the summer month is a second explanation. that being slower during the summer month is a second explanation The positive effect and partly offsetting this is an increase in fees and commissions on AUM-related fees in wealth and asset management. the positive effect and partly offsetting this is an increase in fees and commissions on aum-related fees in wealth and asset management There's no margin development impacting sequentially in the quarter, but more how the fees have fallen between Q2 and Q3. There's no margin development impacting sequentially in the quarter, but more how the fees have fallen between Q2 and Q3. there's no margin development impacting sequentially in the quarter but more how the fees have fallen between q2 and q3

Speaker 4: Hey, Sophie, nice to hear that you're back in a different role. Welcome. I would say that the reason for the more optimistic outlook, as you also pointed to, is partly driven by the monetary stimulus that we've already seen. Let that bite in the economy. Monetary policy typically works with a 12 to 18-month lag, but also, as you pointed out, the fiscal stimulus that is expected to come. Those two, I think, are quite important pillars for economists when they do look at it. Will this increase loan demand? That's the purpose of it. Both the monetary policy wants the economy to pick up in pace and particularly focus on consumption. Fiscal policy tends to be quite effective on consumption. The pattern right now is because uncertainty is high, risks are very mitigated in my book, but uncertainty is still around. Hey, Sophie, nice to hear that you're back in a different role. hey sophie nice to hear that you're back in a different role Welcome. welcome I would say that the reason for the more optimistic outlook, as you also pointed to, is partly driven by the monetary stimulus that we've already seen. i would say that the reason for the more optimistic outlook as you also pointed to is partly driven by the monetary stimulus that we've already seen Let that bite in the economy. let that bite in the economy Monetary policy typically works with a 12 to 18-month lag, but also, as you pointed out, the fiscal stimulus that is expected to come. monetary policy typically works with a 12 to 18-month lag but also as you pointed out the fiscal stimulus that is expected to come Those two, I think, are quite important pillars for economists when they do look at it. those two i think are quite important pillars for economists when they do look at it Will this increase loan demand? will this increase loan demand That's the purpose of it. that's the purpose of it Both the monetary policy wants the economy to pick up in pace and particularly focus on consumption. both the monetary policy wants the economy to pick up in pace and particularly focus on consumption Fiscal policy tends to be quite effective on consumption. fiscal policy tends to be quite effective on consumption The pattern right now is because uncertainty is high, risks are very mitigated in my book, but uncertainty is still around. the pattern right now is because uncertainty is high risks are very mitigated in my book but uncertainty is still around It means that households have been quite keen to save rather than consume. All this is kind of part of that package to become a little bit more constructive for the future, and it should be supportive of growth. That prediction I'm not making, I'm just reasoning around it. It's definitely a part of it. When it comes to priority between growth and shareholder return, I assume you mean shareholder repatriation and not just total shareholder return because I think growth in SEB, having more clients, doing more with them, is very much aligned with total shareholder return. That's the same thing. Of course, you might want to save more capital for the business rather than repatriating it. There it's pretty easy. We always try to develop the bank first. I would love to use the capital that we generate to do more business to generate even more. It means that households have been quite keen to save rather than consume. it means that households have been quite keen to save rather than consume All this is kind of part of that package to become a little bit more constructive for the future, and it should be supportive of growth. all this is kind of part of that package to become a little bit more constructive for the future and it should be supportive of growth That prediction I'm not making, I'm just reasoning around it. that prediction i'm not making i'm just reasoning around it It's definitely a part of it. it's definitely a part of it When it comes to priority between growth and shareholder return, I assume you mean shareholder repatriation and not just total shareholder return because I think growth in SEB, having more clients, doing more with them, is very much aligned with total shareholder return. when it comes to priority between growth and shareholder return i assume you mean shareholder repatriation and not just total shareholder return because i think growth in seb having more clients doing more with them is very much aligned with total shareholder return That's the same thing. that's the same thing Of course, you might want to save more capital for the business rather than repatriating it. of course you might want to save more capital for the business rather than repatriating it There it's pretty easy. there it's pretty easy We always try to develop the bank first. we always try to develop the bank first I would love to use the capital that we generate to do more business to generate even more. i would love to use the capital that we generate to do more business to generate even more That's typically not a big conflict. Otherwise, as we've had for many years now, we generate more than we can redeploy, and then we'll pay it out to shareholders. That's typically not a big conflict. that's typically not a big conflict Otherwise, as we've had for many years now, we generate more than we can redeploy, and then we'll pay it out to shareholders. otherwise as we've had for many years now we generate more than we can redeploy and then we'll pay it out to shareholders Okay. That's very clear. Maybe just on the fee side, one follow-up. In terms of DNB Carnegie, you haven't seen any business opportunities gaining any, being able to take any market share from them? Okay. okay That's very clear. that's very clear Maybe just on the fee side, one follow-up. maybe just on the fee side one follow-up In terms of DNB Carnegie, you haven't seen any business opportunities gaining any, being able to take any market share from them? in terms of dnb carnegie you haven't seen any business opportunities gaining any being able to take any market share from them No, I also want to acknowledge that it's a formidable competitor, and they're very good. This is not an easy market to win in, and it's getting tough out there. No, I also want to acknowledge that it's a formidable competitor, and they're very good. no i also want to acknowledge that it's a formidable competitor and they're very good This is not an easy market to win in, and it's getting tough out there. this is not an easy market to win in and it's getting tough out there Okay. Very clear. Thank you. Okay. okay Very clear. very clear Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Tariq El-Mijad from Bank of America. Please go ahead. Thank you. thank you We will now take the next question from the line of Tariq El-Mijad from Bank of America. we will now take the next question from the line of tariq el-mijad from bank of america Please go ahead. please go ahead Hi, good morning. I just wanted to come back on Johan's long question as well on AI from a different angle. You know, the scalability of use of AI and the benefits also, I think, is based on how your core systems can actually be plugged to these AI tools. How do you consider today your IT system ready for this, I would say, evolution in terms of using for AI, especially in your triangle on the parts on integration into the products? Also, I mean, there is a perception that the cost to achieve is actually much lower using AI versus the traditional kind of cost-savings measures in the past. Would you confirm that perception? Hi, good morning. hi good morning I just wanted to come back on Johan's long question as well on AI from a different angle. i just wanted to come back on johan's long question as well on ai from a different angle You know, the scalability of use of AI and the benefits also, I think, is based on how your core systems can actually be plugged to these AI tools. you know the scalability of use of ai and the benefits also i think is based on how your core systems can actually be plugged to these ai tools How do you consider today your IT system ready for this, I would say, evolution in terms of using for AI, especially in your triangle on the parts on integration into the products? how do you consider today your it system ready for this i would say evolution in terms of using for ai especially in your triangle on the parts on integration into the products Also, I mean, there is a perception that the cost to achieve is actually much lower using AI versus the traditional kind of cost-savings measures in the past. also i mean there is a perception that the cost to achieve is actually much lower using ai versus the traditional kind of cost-savings measures in the past Would you confirm that perception? would you confirm that perception Just very quickly on the capital part, Sophie, I think I addressed that partly, but I think you commented in the past that to go below the 300 basis points buffer or the high end of the range, that would be used for growth rather than special distribution on the buyback. Given the headwinds on CET1 coming on RWA coming in the next quarters from the add-ons on Baltics, should we assume that now the priority is for volume growth and the buyback would probably be secondary here? Thank you. Just very quickly on the capital part, Sophie, I think I addressed that partly, but I think you commented in the past that to go below the 300 basis points buffer or the high end of the range, that would be used for growth rather than special distribution on the buyback. just very quickly on the capital part sophie i think i addressed that partly but i think you commented in the past that to go below the 300 basis points buffer or the high end of the range that would be used for growth rather than special distribution on the buyback Given the headwinds on CET1 coming on RWA coming in the next quarters from the add-ons on Baltics, should we assume that now the priority is for volume growth and the buyback would probably be secondary here? given the headwinds on cet1 coming on rwa coming in the next quarters from the add-ons on baltics should we assume that now the priority is for volume growth and the buyback would probably be secondary here Thank you. thank you

Speaker 8: If I start with the question on AI, you're right that there is a broader upgrade of core systems in general required to some extent. This reflects our ongoing work with our technology roadmaps that have been in place for some time. There are also opportunities in multiple areas where AI can be applied without necessarily completing all those upgrades. There are also ways where we can work with compartmentalizing certain parts of our legacy technology and making APIs available for new applications. A third option that is also interesting to explore is actually to have some of that legacy code rewritten with the help of AI. There are ways both in which we can address the challenges with traditional legacy systems, but also where we can proceed without necessarily completing those investments. If I start with the question on AI, you're right that there is a broader upgrade of core systems in general required to some extent. if i start with the question on ai you're right that there is a broader upgrade of core systems in general required to some extent This reflects our ongoing work with our technology roadmaps that have been in place for some time. this reflects our ongoing work with our technology roadmaps that have been in place for some time There are also opportunities in multiple areas where AI can be applied without necessarily completing all those upgrades. there are also opportunities in multiple areas where ai can be applied without necessarily completing all those upgrades There are also ways where we can work with compartmentalizing certain parts of our legacy technology and making APIs available for new applications. there are also ways where we can work with compartmentalizing certain parts of our legacy technology and making apis available for new applications A third option that is also interesting to explore is actually to have some of that legacy code rewritten with the help of AI. a third option that is also interesting to explore is actually to have some of that legacy code rewritten with the help of ai There are ways both in which we can address the challenges with traditional legacy systems, but also where we can proceed without necessarily completing those investments. there are ways both in which we can address the challenges with traditional legacy systems but also where we can proceed without necessarily completing those investments When it comes to the triangle, I think you're right to say that from a product perspective, it's probably where progress has been the least thus far in terms of introducing and implementing AI capabilities in the products. Where we have thus far seen the best impact and the greatest achievements thus far has been in running. What we're highlighting this quarter as well is, of course, the interesting opportunity working with a growing and exciting AI community in Sweden and the Nordics. We'll continue to, of course, monitor this closely, but there are certainly areas where we can accelerate with AI implementation in parallel with legacy upgrades. When it comes to the triangle, I think you're right to say that from a product perspective, it's probably where progress has been the least thus far in terms of introducing and implementing AI capabilities in the products. when it comes to the triangle i think you're right to say that from a product perspective it's probably where progress has been the least thus far in terms of introducing and implementing ai capabilities in the products Where we have thus far seen the best impact and the greatest achievements thus far has been in running. where we have thus far seen the best impact and the greatest achievements thus far has been in running What we're highlighting this quarter as well is, of course, the interesting opportunity working with a growing and exciting AI community in Sweden and the Nordics. what we're highlighting this quarter as well is of course the interesting opportunity working with a growing and exciting ai community in sweden and the nordics We'll continue to, of course, monitor this closely, but there are certainly areas where we can accelerate with AI implementation in parallel with legacy upgrades. we'll continue to of course monitor this closely but there are certainly areas where we can accelerate with ai implementation in parallel with legacy upgrades

Speaker 4: Yeah, and if I just may add, it's interesting. We had the IMF, IIF trip to Washington where all bankers met last week, that it is a clear distinction, the ones selling AI capabilities between the ones buying them and selling them and how much value has been created lately. This third point that Christopher made, the third leg, is actually us banking the AI community, which is doing very, very well. On the capital repatriation preferences, let's say that if we are above 300, as we have a stated target board mandate to be in the range of 1 to 300, we have one type of dialogue. That is how to best come back to the range where the 300 is the upper end. That's the discussion we've had for three years from the day we had to cancel the dividends post-COVID. Yeah, and if I just may add, it's interesting. yeah and if i just may add it's interesting We had the IMF, IIF trip to Washington where all bankers met last week, that it is a clear distinction, the ones selling AI capabilities between the ones buying them and selling them and how much value has been created lately. we had the imf iif trip to washington where all bankers met last week that it is a clear distinction the ones selling ai capabilities between the ones buying them and selling them and how much value has been created lately This third point that Christopher made, the third leg, is actually us banking the AI community, which is doing very, very well. this third point that christopher made the third leg is actually us banking the ai community which is doing very very well On the capital repatriation preferences, let's say that if we are above 300, as we have a stated target board mandate to be in the range of 1 to 300, we have one type of dialogue. on the capital repatriation preferences let's say that if we are above 300 as we have a stated target board mandate to be in the range of 1 to 300 we have one type of dialogue That is how to best come back to the range where the 300 is the upper end. that is how to best come back to the range where the 300 is the upper end That's the discussion we've had for three years from the day we had to cancel the dividends post-COVID. that's the discussion we've had for three years from the day we had to cancel the dividends post-covid Of course, that kind of is the new now. If we're in the range, we have a more forward-looking discussion in the board in December where we typically have room for both. Don't assume that you cannot do a share buyback only because you're in the range. However, there is a different discussion. It's more about if lending and if we want to retain it to improve business of over and beyond 15% return on equity. If there's a reasonable degree of probability we know how to do that in the coming years, we'd like to be able to capitalize on that. If not, then, of course, it becomes more of a question of how to repatriate capital to the shareholders with a base 50% of profits go in the form of dividend. Of course, that kind of is the new now. of course that kind of is the new now If we're in the range, we have a more forward-looking discussion in the board in December where we typically have room for both. if we're in the range we have a more forward-looking discussion in the board in december where we typically have room for both Don't assume that you cannot do a share buyback only because you're in the range. don't assume that you cannot do a share buyback only because you're in the range However, there is a different discussion. however there is a different discussion It's more about if lending and if we want to retain it to improve business of over and beyond 15% return on equity. it's more about if lending and if we want to retain it to improve business of over and beyond 15% return on equity If there's a reasonable degree of probability we know how to do that in the coming years, we'd like to be able to capitalize on that. if there's a reasonable degree of probability we know how to do that in the coming years we'd like to be able to capitalize on that If not, then, of course, it becomes more of a question of how to repatriate capital to the shareholders with a base 50% of profits go in the form of dividend. if not then of course it becomes more of a question of how to repatriate capital to the shareholders with a base 50% of profits go in the form of dividend As you can see in history, we've used both extra dividends in combination with share buybacks to look at. That's the forward looking. I also would say just the numbers, you need pretty significant loan growth numbers for this not to be able for SEB not to be able to do capital repatriation in a combination of two or three types. It would be lovely if that would happen, but that's a luxury problem. As you can see in history, we've used both extra dividends in combination with share buybacks to look at. as you can see in history we've used both extra dividends in combination with share buybacks to look at That's the forward looking. that's the forward looking I also would say just the numbers, you need pretty significant loan growth numbers for this not to be able for SEB not to be able to do capital repatriation in a combination of two or three types. i also would say just the numbers you need pretty significant loan growth numbers for this not to be able for seb not to be able to do capital repatriation in a combination of two or three types It would be lovely if that would happen, but that's a luxury problem. it would be lovely if that would happen but that's a luxury problem Thank you very much. Very clear. Thank you very much. thank you very much Very clear. very clear

Speaker 2: Thank you. We will now take the next question from the line of Nicholas McBeath from DNB Carnegie. Please go ahead. Thank you. thank you We will now take the next question from the line of Nicholas McBeath from DNB Carnegie. we will now take the next question from the line of nicholas mcbeath from dnb carnegie Please go ahead. please go ahead Thank you. Good morning. My first question was on the NFI line, which came in a bit below recent quarters in Q3. I was wondering how you think about how the lower interest rate environment is affecting this revenue line. With your current macro outlook for 2026, how confident are you that your previous indication of the past 16 quarters' average is a good indication where the normalized NFI line should be? How do you think about that given the ultimate macro outlook for the next year with, yeah, maybe lower interest rates and possibly also lower volatility than what we've seen in the past few years? Thank you. thank you Good morning. good morning My first question was on the NFI line, which came in a bit below recent quarters in Q3. my first question was on the nfi line which came in a bit below recent quarters in q3 I was wondering how you think about how the lower interest rate environment is affecting this revenue line. i was wondering how you think about how the lower interest rate environment is affecting this revenue line With your current macro outlook for 2026, how confident are you that your previous indication of the past 16 quarters' average is a good indication where the normalized NFI line should be? with your current macro outlook for 2026 how confident are you that your previous indication of the past 16 quarters' average is a good indication where the normalized nfi line should be How do you think about that given the ultimate macro outlook for the next year with, yeah, maybe lower interest rates and possibly also lower volatility than what we've seen in the past few years? how do you think about that given the ultimate macro outlook for the next year with yeah maybe lower interest rates and possibly also lower volatility than what we've seen in the past few years

Speaker 8: Thank you, Nikola. I think within that number that you have in the NFI number, for us, these are to a large extent customer-related income. Taking aside the strategic stakes and the mark-to-market and the valuation gains that we present separately and the XVAs, we have a significant proportion of our FICC business booked within NFI. Within the FICC, we have the fixed income, currencies, and commodities. If I look at the third quarter, we had, after the very high level of volatility in the second quarter, a lower level of volatility in the third quarter in FX, which resulted in a somewhat slower activity related to our customer demand. Within fixed income, on the other hand, activity levels remained high with credit spreads at very low levels, issuance continues, and there was a clear demand to pre-fund during those favorable conditions. Thank you, Nikola. thank you nikola I think within that number that you have in the NFI number, for us, these are to a large extent customer-related income. i think within that number that you have in the nfi number for us these are to a large extent customer-related income Taking aside the strategic stakes and the mark-to-market and the valuation gains that we present separately and the XVAs, we have a significant proportion of our FICC business booked within NFI. taking aside the strategic stakes and the mark-to-market and the valuation gains that we present separately and the xvas we have a significant proportion of our ficc business booked within nfi Within the FICC, we have the fixed income, currencies, and commodities. within the ficc we have the fixed income currencies and commodities If I look at the third quarter, we had, after the very high level of volatility in the second quarter, a lower level of volatility in the third quarter in FX, which resulted in a somewhat slower activity related to our customer demand. if i look at the third quarter we had after the very high level of volatility in the second quarter a lower level of volatility in the third quarter in fx which resulted in a somewhat slower activity related to our customer demand Within fixed income, on the other hand, activity levels remained high with credit spreads at very low levels, issuance continues, and there was a clear demand to pre-fund during those favorable conditions. within fixed income on the other hand activity levels remained high with credit spreads at very low levels issuance continues and there was a clear demand to pre-fund during those favorable conditions Within commodities, we are, as you know, the one Nordic bank that does offer this, and we have seen that contribution growing. There is an element of volatility, but we think that the underlying structural development there is also constructive. As we look forward, there are effects driving this. The volatility in FX space and the demand for FX products will be impacting that part of the FICC booked in NFI. We also have the steepness of the yield curve, which impacts the treatment of the inventory and the mark-to-market of the inventory within the fixed income in NFI as well. At this point in time, we have our range, and I think that remains our best prediction for the future. Within commodities, we are, as you know, the one Nordic bank that does offer this, and we have seen that contribution growing. within commodities we are as you know the one nordic bank that does offer this and we have seen that contribution growing There is an element of volatility, but we think that the underlying structural development there is also constructive. there is an element of volatility but we think that the underlying structural development there is also constructive As we look forward, there are effects driving this. as we look forward there are effects driving this The volatility in FX space and the demand for FX products will be impacting that part of the FICC booked in NFI. the volatility in fx space and the demand for fx products will be impacting that part of the ficc booked in nfi We also have the steepness of the yield curve, which impacts the treatment of the inventory and the mark-to-market of the inventory within the fixed income in NFI as well. we also have the steepness of the yield curve which impacts the treatment of the inventory and the mark-to-market of the inventory within the fixed income in nfi as well At this point in time, we have our range, and I think that remains our best prediction for the future. at this point in time we have our range and i think that remains our best prediction for the future All right. I had a question on if you have any general remarks or thoughts, how you're reasoning regarding the cost growth into 2026. I mean, on the one hand, you have lower rates, which are a drag on return on equity, but on the other hand, as you alluded to in the call, potentially higher activity, loan growth, economic recovery during next year. Do you think 2026 is the year to expand and invest more or keep the hiring freeze and try and defend the profitability? All right. all right I had a question on if you have any general remarks or thoughts, how you're reasoning regarding the cost growth into 2026. i had a question on if you have any general remarks or thoughts how you're reasoning regarding the cost growth into 2026 I mean, on the one hand, you have lower rates, which are a drag on return on equity, but on the other hand, as you alluded to in the call, potentially higher activity, loan growth, economic recovery during next year. i mean on the one hand you have lower rates which are a drag on return on equity but on the other hand as you alluded to in the call potentially higher activity loan growth economic recovery during next year Do you think 2026 is the year to expand and invest more or keep the hiring freeze and try and defend the profitability? do you think 2026 is the year to expand and invest more or keep the hiring freeze and try and defend the profitability

Speaker 4: Yeah, thank you, Nicola. I'll start and ask Christopher to add. The current, let's call it, plan of attack on cost control is the one that we, I think, launched last quarter or two quarters ago, and that is to change the pathway that we've been on for some years now of increasing investments in the bank and to tail that increase off. As you can see, this quarter, it looks to be supportive of actually happening. We are in a different place now where you have a different trajectory. The purpose is to sit when we do our business plan in December and hopefully be in a position where we have freed up some operational costs that we can discuss with the board and the management team how to redeploy. Yeah, thank you, Nicola. yeah thank you nicola I'll start and ask Christopher to add. i'll start and ask christopher to add The current, let's call it, plan of attack on cost control is the one that we, I think, launched last quarter or two quarters ago, and that is to change the pathway that we've been on for some years now of increasing investments in the bank and to tail that increase off. the current let's call it plan of attack on cost control is the one that we i think launched last quarter or two quarters ago and that is to change the pathway that we've been on for some years now of increasing investments in the bank and to tail that increase off As you can see, this quarter, it looks to be supportive of actually happening. as you can see this quarter it looks to be supportive of actually happening We are in a different place now where you have a different trajectory. we are in a different place now where you have a different trajectory The purpose is to sit when we do our business plan in December and hopefully be in a position where we have freed up some operational costs that we can discuss with the board and the management team how to redeploy. the purpose is to sit when we do our business plan in december and hopefully be in a position where we have freed up some operational costs that we can discuss with the board and the management team how to redeploy It is still a different type of forward outlook now than we've had for the last years, and that is more cost controlled, be cautious, and handle resources a little bit more until we have a clearer look on the income outlook because we really need to have a high return on equity and a low marginal cost of income, so profitability is secure if we were to start investing more. There are many other things, you know, must-do investments in the bank. There's no lack of holes to put all this money in order to maintain a good and solid and robust infrastructure. It is the same tonality we've used now for a couple of quarters. There's no change in that, and that goes beyond the year-end. It's actually to have a little bit of extra flexibility going forward. It is still a different type of forward outlook now than we've had for the last years, and that is more cost controlled, be cautious, and handle resources a little bit more until we have a clearer look on the income outlook because we really need to have a high return on equity and a low marginal cost of income, so profitability is secure if we were to start investing more. it is still a different type of forward outlook now than we've had for the last years and that is more cost controlled be cautious and handle resources a little bit more until we have a clearer look on the income outlook because we really need to have a high return on equity and a low marginal cost of income so profitability is secure if we were to start investing more There are many other things, you know, must-do investments in the bank. there are many other things you know must-do investments in the bank There's no lack of holes to put all this money in order to maintain a good and solid and robust infrastructure. there's no lack of holes to put all this money in order to maintain a good and solid and robust infrastructure It is the same tonality we've used now for a couple of quarters. it is the same tonality we've used now for a couple of quarters There's no change in that, and that goes beyond the year-end. there's no change in that and that goes beyond the year-end It's actually to have a little bit of extra flexibility going forward. it's actually to have a little bit of extra flexibility going forward That doesn't mean that the decision in December where we set the cost frame for 2026 will be up, flat, or down. It just means that there will be a discussion to be had, and we'll communicate it as always in conjunction with the Q4 report. That doesn't mean that the decision in December where we set the cost frame for 2026 will be up, flat, or down. that doesn't mean that the decision in december where we set the cost frame for 2026 will be up flat or down It just means that there will be a discussion to be had, and we'll communicate it as always in conjunction with the Q4 report. it just means that there will be a discussion to be had and we'll communicate it as always in conjunction with the q4 report All right. Thank you. Just a bit of a follow-up question. Could you please give us the AirPlus implementation costs for Q3, and how you think about the implementation costs in 2026? All right. all right Thank you. thank you Just a bit of a follow-up question. just a bit of a follow-up question Could you please give us the AirPlus implementation costs for Q3, and how you think about the implementation costs in 2026? could you please give us the airplus implementation costs for q3 and how you think about the implementation costs in 2026

Speaker 8: Yeah. The AirPlus implementation cost in the third quarter was around SEK 120 million, which means that we year to date have taken a little bit less as a run rate, which leaves a little bit more in the fourth quarter. We have guided to around SEK 700 million in implementation costs for the full year. Yeah. yeah The AirPlus implementation cost in the third quarter was around SEK 120 million, which means that we year to date have taken a little bit less as a run rate, which leaves a little bit more in the fourth quarter. the airplus implementation cost in the third quarter was around sek 120 million which means that we year to date have taken a little bit less as a run rate which leaves a little bit more in the fourth quarter We have guided to around SEK 700 million in implementation costs for the full year. we have guided to around sek 700 million in implementation costs for the full year For next year, how do you think about those costs developing? For next year, how do you think about those costs developing? for next year how do you think about those costs developing As I referred to earlier, we are now reviewing whether there are parts of the implementation program that should be accelerated. We'll be coming back to that together with the cost outlook for 2026, together with our fourth quarter results, Nicola. As I referred to earlier, we are now reviewing whether there are parts of the implementation program that should be accelerated. as i referred to earlier we are now reviewing whether there are parts of the implementation program that should be accelerated We'll be coming back to that together with the cost outlook for 2026, together with our fourth quarter results, Nicola. we'll be coming back to that together with the cost outlook for 2026 together with our fourth quarter results nicola All right. Perfect. Thank you. All right. all right Perfect. perfect Thank you. thank you Thank you. Thank you. thank you

Speaker 2: Thank you. We will now take the next question from the line of Ricardo Rivera from Mediobanca. Please go ahead. Thank you. thank you We will now take the next question from the line of Ricardo Rivera from Mediobanca. we will now take the next question from the line of ricardo rivera from mediobanca Please go ahead. please go ahead Thanks. Thanks a lot for taking my questions. I have three if possible. The first one is on the NII indication, Christopher, that you provided early in the call, meaning NII to bottom out three to six months after the last cuts. Now, raising in the euro area should be done. The Riksbank has cut 25%, okay, I understand the impact on the equity side. The Federal Reserve should cut much more aggressively. You have a much larger amount of U.S.-denominated liabilities than assets. It's $300 billion larger amount of liabilities in dollar. I was wondering why the rate cuts by the Federal Reserve should not have a mitigating impact for the only 25 bps rate cut by the Riksbank. By the way, also this quarter, what you this indication should have happened and did not materialize, NII is actually up quarter on quarter. Thanks. thanks Thanks a lot for taking my questions. thanks a lot for taking my questions I have three if possible. i have three if possible The first one is on the NII indication, Christopher, that you provided early in the call, meaning NII to bottom out three to six months after the last cuts. the first one is on the nii indication christopher that you provided early in the call meaning nii to bottom out three to six months after the last cuts Now, raising in the euro area should be done. now raising in the euro area should be done The Riksbank has cut 25%, okay, I understand the impact on the equity side. the riksbank has cut 25% okay i understand the impact on the equity side The Federal Reserve should cut much more aggressively. the federal reserve should cut much more aggressively You have a much larger amount of U.S.-denominated liabilities than assets. you have a much larger amount of u.s.-denominated liabilities than assets It's $300 billion larger amount of liabilities in dollar. it's $300 billion larger amount of liabilities in dollar I was wondering why the rate cuts by the Federal Reserve should not have a mitigating impact for the only 25 bps rate cut by the Riksbank. i was wondering why the rate cuts by the federal reserve should not have a mitigating impact for the only 25 bps rate cut by the riksbank By the way, also this quarter, what you this indication should have happened and did not materialize, NII is actually up quarter on quarter. by the way also this quarter what you this indication should have happened and did not materialize nii is actually up quarter on quarter I was wondering why you keep reiterating that given the Federal Reserve cut expected in the coming quarters. The second question I have is on the 290 bps buffer. If I'm not mistaken, this includes the whole $50 billion of RWA add-on imposed by the ECB on your Baltic operations, just to confirm my understanding correctly. If I understand it correctly, 290 is already at the top of your range in terms of management buffer when you're expecting to go back to that level in only three months. If that is the way I understand, it's just a matter of how you want to return excess capital rather than if you can keep the current capital return. What is your thinking about that? I have a question of curiosity that's more of curiosity. Overlays go up by $100 million if I'm not mistaken. I was wondering why you keep reiterating that given the Federal Reserve cut expected in the coming quarters. i was wondering why you keep reiterating that given the federal reserve cut expected in the coming quarters The second question I have is on the 290 bps buffer. the second question i have is on the 290 bps buffer If I'm not mistaken, this includes the whole $50 billion of RWA add-on imposed by the ECB on your Baltic operations, just to confirm my understanding correctly. if i'm not mistaken this includes the whole $50 billion of rwa add-on imposed by the ecb on your baltic operations just to confirm my understanding correctly If I understand it correctly, 290 is already at the top of your range in terms of management buffer when you're expecting to go back to that level in only three months. if i understand it correctly 290 is already at the top of your range in terms of management buffer when you're expecting to go back to that level in only three months If that is the way I understand, it's just a matter of how you want to return excess capital rather than if you can keep the current capital return. if that is the way i understand it's just a matter of how you want to return excess capital rather than if you can keep the current capital return What is your thinking about that? what is your thinking about that I have a question of curiosity that's more of curiosity. i have a question of curiosity that's more of curiosity Overlays go up by $100 million if I'm not mistaken. overlays go up by $100 million if i'm not mistaken Some other Nordic banks have actually reduced them or brought it to zero. They're using it, progressively releasing those. Why do you keep accumulating those overlays? When do you expect this to come to an end or this to be used at some point or released or allocated? Thanks. Some other Nordic banks have actually reduced them or brought it to zero. some other nordic banks have actually reduced them or brought it to zero They're using it, progressively releasing those. they're using it progressively releasing those Why do you keep accumulating those overlays? why do you keep accumulating those overlays When do you expect this to come to an end or this to be used at some point or released or allocated? when do you expect this to come to an end or this to be used at some point or released or allocated Thanks. thanks

Speaker 8: Thank you for your questions. I'll start and I'll let Johan contribute as well. We're just going to make sure we have the questions correctly. If I start with the overlay, that is an assessment that we do every quarter. We take into account geopolitical developments. Sometimes we change our macro outlook and assumptions. It's a continuous evaluation of our various exposures across our portfolios. You have also seen in quarters that we have released some of those overlays, and in this quarter, we're adding. It's hard for us, of course, to comment on how other banks are proceeding with this, but that is our process. For the net interest income, you're right. We are reiterating the expectation of a three to six-month lag from the last rate cut till we see the trough. Thank you for your questions. thank you for your questions I'll start and I'll let Johan contribute as well. i'll start and i'll let johan contribute as well We're just going to make sure we have the questions correctly. we're just going to make sure we have the questions correctly If I start with the overlay, that is an assessment that we do every quarter. if i start with the overlay that is an assessment that we do every quarter We take into account geopolitical developments. we take into account geopolitical developments Sometimes we change our macro outlook and assumptions. sometimes we change our macro outlook and assumptions It's a continuous evaluation of our various exposures across our portfolios. it's a continuous evaluation of our various exposures across our portfolios You have also seen in quarters that we have released some of those overlays, and in this quarter, we're adding. you have also seen in quarters that we have released some of those overlays and in this quarter we're adding It's hard for us, of course, to comment on how other banks are proceeding with this, but that is our process. it's hard for us of course to comment on how other banks are proceeding with this but that is our process For the net interest income, you're right. for the net interest income you're right We are reiterating the expectation of a three to six-month lag from the last rate cut till we see the trough. we are reiterating the expectation of a three to six-month lag from the last rate cut till we see the trough What happened in this quarter were a couple of technicalities that led to an increase in net interest income sequentially. One is the number of days. We also refer to the deposit insurance fee that is booked over the year that happened to tilt a little bit more favorably for NII in this quarter. We had a positive FX effect. We also saw some beneficial treasury contributions, partly from the funding costs and what we have been referring to as repricing effects or timing effects. As we then look forward, we continue to see pressure on deposit margins as the rate cuts will make their way through the balance sheet. What happened in this quarter were a couple of technicalities that led to an increase in net interest income sequentially. what happened in this quarter were a couple of technicalities that led to an increase in net interest income sequentially One is the number of days. one is the number of days We also refer to the deposit insurance fee that is booked over the year that happened to tilt a little bit more favorably for NII in this quarter. we also refer to the deposit insurance fee that is booked over the year that happened to tilt a little bit more favorably for nii in this quarter We had a positive FX effect. we had a positive fx effect We also saw some beneficial treasury contributions, partly from the funding costs and what we have been referring to as repricing effects or timing effects. we also saw some beneficial treasury contributions partly from the funding costs and what we have been referring to as repricing effects or timing effects As we then look forward, we continue to see pressure on deposit margins as the rate cuts will make their way through the balance sheet. as we then look forward we continue to see pressure on deposit margins as the rate cuts will make their way through the balance sheet Also bearing in mind that some of our transaction accounts, both for corporates and households, are down to zero, which means that, of course, the further down we come in the rate cycle, the more any incremental cut will have as an impact. Also bearing in mind that some of our transaction accounts, both for corporates and households, are down to zero, which means that, of course, the further down we come in the rate cycle, the more any incremental cut will have as an impact. also bearing in mind that some of our transaction accounts both for corporates and households are down to zero which means that of course the further down we come in the rate cycle the more any incremental cut will have as an impact

Speaker 2: Finally, to your comment around the U.S.-denominated deposits, those are primarily wholesale deposits. Those are priced off of market rates, and that's effectively a margin that moves with market rates, rather than having an impact as they are being discretionary priced. They are market-rate linked. On your question on... Finally, to your comment around the U.S.-denominated deposits, those are primarily wholesale deposits. finally to your comment around the u.s.-denominated deposits those are primarily wholesale deposits Those are priced off of market rates, and that's effectively a margin that moves with market rates, rather than having an impact as they are being discretionary priced. those are priced off of market rates and that's effectively a margin that moves with market rates rather than having an impact as they are being discretionary priced They are market-rate linked. they are market-rate linked On your question on... on your question on

Speaker 4: This will go down. This will go down. The Fed will cut this stuff, this will go down. The cost of this stuff will go down. This will go down. this will go down This will go down. this will go down The Fed will cut this stuff, this will go down. the fed will cut this stuff, this will go down The cost of this stuff will go down. the cost of this stuff will go down

Speaker 2: share buyback program is progressing as planned. share buyback program is progressing as planned. share buyback program is progressing as planned

Speaker 4: When they... When they... when they

Speaker 2: Yes. Yes. yes

Speaker 4: Of this wholesale funding, and it's SEK 400 billion. Of this wholesale funding, and it's SEK 400 billion. of this wholesale funding and it's sek 400 billion

Speaker 2: Right. Correct. Of course, the impact will then be on the asset side when rates are being cut, when we have U.S.-denominated loans that they are funded by. Right. right Correct. correct Of course, the impact will then be on the asset side when rates are being cut, when we have U.S.-denominated loans that they are funded by. of course the impact will then be on the asset side when rates are being cut when we have u.s.-denominated loans that they are funded by

Speaker 4: Sure. It's smaller than that. The delta is smaller. The liabilities are much, much larger than the assets in dollars. Much larger. $300 billion. Sure. sure It's smaller than that. it's smaller than that The delta is smaller. the delta is smaller The liabilities are much, much larger than the assets in dollars. the liabilities are much much larger than the assets in dollars Much larger. $300 billion. much larger $300 billion

Speaker 2: Right. Right. right

Speaker 4: In fact. In fact. in fact

Speaker 2: What we have also mentioned when it comes to the U.S.-denominated deposits is the funds that we're also placing with the Fed. That is effectively us operating in the U.S. with our balance sheet, and we would collect deposits from U.S. financial institutions and place them with the Fed. That is effectively a relatively opportunistic business that we have been running there, and that goes to an element of lumpiness between quarters, but that accounts for a sizable part of the U.S.-denominated deposits as well. What we have also mentioned when it comes to the U.S.-denominated deposits is the funds that we're also placing with the Fed. what we have also mentioned when it comes to the u.s.-denominated deposits is the funds that we're also placing with the fed That is effectively us operating in the U.S. with our balance sheet, and we would collect deposits from U.S. financial institutions and place them with the Fed. that is effectively us operating in the u.s with our balance sheet and we would collect deposits from u.s financial institutions and place them with the fed That is effectively a relatively opportunistic business that we have been running there, and that goes to an element of lumpiness between quarters, but that accounts for a sizable part of the U.S.-denominated deposits as well. that is effectively a relatively opportunistic business that we have been running there and that goes to an element of lumpiness between quarters but that accounts for a sizable part of the u.s.-denominated deposits as well

Speaker 4: All right. What I see is $187.88 billion cash at the Federal Reserve, I guess, and you have $408.9 billion deposits, which you say is wholesale, is going to go down. There's one number here is more than twice the other. I don't understand how this cannot be positive, regardless of FX and all the other stuff. All right. all right What I see is $187.88 billion cash at the Federal Reserve, I guess, and you have $408.9 billion deposits, which you say is wholesale, is going to go down. what i see is $187.88 billion cash at the federal reserve i guess and you have $408.9 billion deposits which you say is wholesale is going to go down There's one number here is more than twice the other. there's one number here is more than twice the other I don't understand how this cannot be positive, regardless of FX and all the other stuff. i don't understand how this cannot be positive regardless of fx and all the other stuff

Speaker 2: I think... I think... i think

Speaker 4: Calendar days, whatever. Calendar days, whatever. calendar days whatever

Speaker 2: No, I think this is one of many moving parts in the balance sheet. When we are looking at the impact in totality from the rate cuts, there are various dimensions moving in different directions. This is one impact that we get from the development of the Fed funds. We have other parts of the balance sheet that's impacted by the ECB rates and others from the Riksbank. It is taking all these into consideration together, where we conclude that running this through our balance sheet as it looks today, we expect the trough. It doesn't mean that all the variables go in the same direction. Some, to your point, might be contributing positively, but the net of it all, we expect to result in a trough three to six months after the last cut. No, I think this is one of many moving parts in the balance sheet. no i think this is one of many moving parts in the balance sheet When we are looking at the impact in totality from the rate cuts, there are various dimensions moving in different directions. when we are looking at the impact in totality from the rate cuts there are various dimensions moving in different directions This is one impact that we get from the development of the Fed funds. this is one impact that we get from the development of the fed funds We have other parts of the balance sheet that's impacted by the ECB rates and others from the Riksbank. we have other parts of the balance sheet that's impacted by the ecb rates and others from the riksbank It is taking all these into consideration together, where we conclude that running this through our balance sheet as it looks today, we expect the trough. it is taking all these into consideration together where we conclude that running this through our balance sheet as it looks today we expect the trough It doesn't mean that all the variables go in the same direction. it doesn't mean that all the variables go in the same direction Some, to your point, might be contributing positively, but the net of it all, we expect to result in a trough three to six months after the last cut. some to your point might be contributing positively but the net of it all we expect to result in a trough three to six months after the last cut

Speaker 4: All right. Okay, good. Thanks. All right. all right Okay, good. okay good Thanks. thanks

Speaker 2: Thank you. Thank you. thank you

Speaker 4: The 290. The 290. the 290

Speaker 8: Sorry, can you repeat that question, Ricardo? Sorry, can you repeat that question, Ricardo? sorry can you repeat that question ricardo

Speaker 4: The question is 290 is already the top of your, basically, the top of your management buffer, and that 290 includes the whole 50 billion, you know, which should be, as far as I remember, phased progressively. If I'm not mistaken, you got 10 billion this quarter. Maybe you will have another 10 billion next quarter. I don't know. The real number is the 290. That is already at the top of your buffer. How do you see this? Is this where you're expecting it to be, already basically at the top of your buffer only with the whole impact of the ECB imposed add-on after only three months? There has been, let's say, some discussion around the impact of this stuff into mostly 2026, affecting your capital return, blah, blah, blah, blah, blah. The question is 290 is already the top of your, basically, the top of your management buffer, and that 290 includes the whole 50 billion, you know, which should be, as far as I remember, phased progressively. the question is 290 is already the top of your basically the top of your management buffer and that 290 includes the whole 50 billion you know which should be as far as i remember phased progressively If I'm not mistaken, you got 10 billion this quarter. if i'm not mistaken you got 10 billion this quarter Maybe you will have another 10 billion next quarter. maybe you will have another 10 billion next quarter I don't know. i don't know The real number is the 290. the real number is the 290 That is already at the top of your buffer. that is already at the top of your buffer How do you see this? how do you see this Is this where you're expecting it to be, already basically at the top of your buffer only with the whole impact of the ECB imposed add-on after only three months? is this where you're expecting it to be already basically at the top of your buffer only with the whole impact of the ecb imposed add-on after only three months There has been, let's say, some discussion around the impact of this stuff into mostly 2026, affecting your capital return, blah, blah, blah, blah, blah. there has been let's say some discussion around the impact of this stuff into mostly 2026 affecting your capital return blah blah blah blah blah

Speaker 8: Yeah, I think we understand that. Yeah, I think we understand that. yeah i think we understand that

Speaker 2: I can just start, Ricardo, with confirming that we have taken in this quarter the equivalent of 18 basis points, so a 10 billion phase-in of RWA in the Baltics, and we're showing that the remaining, what we estimate to be another 70 basis point impact, would take our pro forma buffer to 290 basis points, where we have booked so far in this quarter 10 billion of that. I can just start, Ricardo, with confirming that we have taken in this quarter the equivalent of 18 basis points, so a 10 billion phase-in of RWA in the Baltics, and we're showing that the remaining, what we estimate to be another 70 basis point impact, would take our pro forma buffer to 290 basis points, where we have booked so far in this quarter 10 billion of that. i can just start ricardo with confirming that we have taken in this quarter the equivalent of 18 basis points so a 10 billion phase-in of rwa in the baltics and we're showing that the remaining what we estimate to be another 70 basis point impact would take our pro forma buffer to 290 basis points where we have booked so far in this quarter 10 billion of that

Speaker 8: Just to be clear, that's the pro forma today. I think you're absolutely right. It's the 290 if we would technically have deducted all of it, and it would have been over. As we, for accounting reasons and other things, couldn't or wouldn't do that, we just showed it pro forma. You have, as I think you alluded to, now capital generation in the dynamic analysis going forward will, of course, continue to increase this number, everything else being equal. Therefore, I think that we will have a better position when we get to Q4, and we will have to look at the current capital position then in a quarter to then for the board deliberations on repatriation. Was that an answer? Just to be clear, that's the pro forma today. just to be clear that's the pro forma today I think you're absolutely right. i think you're absolutely right It's the 290 if we would technically have deducted all of it, and it would have been over. it's the 290 if we would technically have deducted all of it and it would have been over As we, for accounting reasons and other things, couldn't or wouldn't do that, we just showed it pro forma. as we for accounting reasons and other things couldn't or wouldn't do that we just showed it pro forma You have, as I think you alluded to, now capital generation in the dynamic analysis going forward will, of course, continue to increase this number, everything else being equal. you have as i think you alluded to now capital generation in the dynamic analysis going forward will of course continue to increase this number everything else being equal Therefore, I think that we will have a better position when we get to Q4, and we will have to look at the current capital position then in a quarter to then for the board deliberations on repatriation. therefore i think that we will have a better position when we get to q4 and we will have to look at the current capital position then in a quarter to then for the board deliberations on repatriation Was that an answer? was that an answer

Speaker 4: Yeah. Definitely, that's an answer. $290 before you start accruing the dividend, 50% payout or whatever it is, and the rest we'll see. The starting point is $290. Yeah. yeah Definitely, that's an answer. $290 before you start accruing the dividend, 50% payout or whatever it is, and the rest we'll see. definitely that's an answer $290 before you start accruing the dividend 50% payout or whatever it is and the rest we'll see The starting point is $290. the starting point is $290

Speaker 2: Yeah. Yeah. yeah

Speaker 8: Correct. Correct. correct

Speaker 4: Yeah, yeah. Okay, fair enough. Thanks. Yeah, yeah. yeah yeah Okay, fair enough. okay fair enough Thanks. thanks

Speaker 2: Thank you very much. Thank you very much. thank you very much Thank you. We will now take the next question. It's your question from Bettina Thurner from BNP Paribas Exane. Please go ahead. Thank you. thank you We will now take the next question. we will now take the next question It's your question from Bettina Thurner from BNP Paribas Exane. it's your question from bettina thurner from bnp paribas exane Please go ahead. please go ahead Yeah. Hi. Good morning. I would just have two clarification questions, please. The first one on NII. You have been quite helpful over the past few quarters to try and isolate the temporary effect in the net interest income base. For this quarter, should we look at the effect in treasury that you mentioned before of repricing quicker? Is that the 100 million, or would there be other parts of the NII that you would also expect to get out again or reverse partially in the last quarter of this year or first quarter of next year? The second question would be on the dividend. At the start of this year, you said you had the intention to pay out a seven-annual dividend next or in the next year. Is that still the plan, or are you still deciding on that? Yeah. yeah Hi. hi Good morning. good morning I would just have two clarification questions, please. i would just have two clarification questions please The first one on NII. the first one on nii You have been quite helpful over the past few quarters to try and isolate the temporary effect in the net interest income base. you have been quite helpful over the past few quarters to try and isolate the temporary effect in the net interest income base For this quarter, should we look at the effect in treasury that you mentioned before of repricing quicker? for this quarter should we look at the effect in treasury that you mentioned before of repricing quicker Is that the 100 million, or would there be other parts of the NII that you would also expect to get out again or reverse partially in the last quarter of this year or first quarter of next year? is that the 100 million or would there be other parts of the nii that you would also expect to get out again or reverse partially in the last quarter of this year or first quarter of next year The second question would be on the dividend. the second question would be on the dividend At the start of this year, you said you had the intention to pay out a seven-annual dividend next or in the next year. at the start of this year you said you had the intention to pay out a seven-annual dividend next or in the next year Is that still the plan, or are you still deciding on that? is that still the plan or are you still deciding on that If you could just give a small update on that, please. Thank you. If you could just give a small update on that, please. if you could just give a small update on that please Thank you. thank you Thank you, Bettina. On your first question on net interest income, I think the number that you're referring to, the $100 million or so as a positive impact in Q3 from those timing effects, is the number that you should have in mind for that effect going forward. For the semiannual dividend, you're right. That is something that we mentioned at the start of the year, and we have ongoing dialogues with our shareholders. That's something we'll come back to when we report our fourth quarter results and come back to the capital question. Thank you, Bettina. thank you bettina On your first question on net interest income, I think the number that you're referring to, the $100 million or so as a positive impact in Q3 from those timing effects, is the number that you should have in mind for that effect going forward. on your first question on net interest income i think the number that you're referring to the $100 million or so as a positive impact in q3 from those timing effects is the number that you should have in mind for that effect going forward For the semiannual dividend, you're right. for the semiannual dividend you're right That is something that we mentioned at the start of the year, and we have ongoing dialogues with our shareholders. that is something that we mentioned at the start of the year and we have ongoing dialogues with our shareholders That's something we'll come back to when we report our fourth quarter results and come back to the capital question. that's something we'll come back to when we report our fourth quarter results and come back to the capital question If I can just double-check, it's not set in stone yet, let's say, on the semiannual dividend? If I can just double-check, it's not set in stone yet, let's say, on the semiannual dividend? if i can just double-check it's not set in stone yet let's say on the semiannual dividend Correct. That's correct. Correct. correct That's correct. that's correct Okay, perfect. Thank you very much. Okay, perfect. okay perfect Thank you very much. thank you very much Thank you. That's all the time we have for questions today. I would like to hand back over to Johan Torgeby for closing remarks. Thank you. thank you That's all the time we have for questions today. that's all the time we have for questions today I would like to hand back over to Johan Torgeby for closing remarks. i would like to hand back over to johan torgeby for closing remarks

Speaker 8: I'll just say thank you, everyone, for your participation and your interest in SEB, and look forward to seeing you soon. I'll just say thank you, everyone, for your participation and your interest in SEB, and look forward to seeing you soon. i'll just say thank you everyone for your participation and your interest in seb and look forward to seeing you soon This concludes today's conference call. Thank you for participating. You may now disconnect. This concludes today's conference call. this concludes today's conference call Thank you for participating. thank you for participating You may now disconnect. you may now disconnect