Morrow Bank (Stockholm:MORROW) Q1 2026 Earnings Call

0:00 Good morning and welcome to today's presentation with Moro Bank. We'll start with the presentation followed by Q&A. So if you're calling in and have any questions, please press star 9 to raise your hand and star 6 to unmute yourself when you get the word. You can also submit written questions using the form located to the right. And with that said, please go ahead with your presentation.

0:19 Thank you very much and welcome also from our side. My name is Øyvind Ohanes. I'm the CEO of Morobank and with me, as always, I have Erik Holtedal, the bank's CFO. And as you heard, we will start as usual with a presentation and obviously open up for questions at the end of the presentation or after the presentation. So let me start by flipping to the first page, looking back at our first quarter as a Swedish bank. It feels like ages ago that we moved the bank from Norway to Sweden, but it was actually in the first quarter. So this is the first report then as a Swedish bank.

1:04 Overall, looking at the results and what we have delivered in the first quarter, I am actually very happy with the quarter. In addition to the numbers that you see on this page, sort of the main KPIs, financial KPIs for the quarter, we have delivered on some very important transformative strategic initiatives for the bank in the quarter. But let's look at some of the numbers here first related to the quarter. We saw strong organic growth in the quarter. We reported a growth of 7%. Looking at year on year, we grew around 23%. So we continue to deliver good growth, organic growth in the quarter. Now reporting a total loan book of 18 billion Swedish kronor. And as you can see to the right hand, Profit before tax came in at 87 million Swedish kronor. That's roughly up 10% versus the comparable quarter of Q1 last year, which again is a solid result, we believe. and as I said for us the even more important things that happened in quarter was actually some of those strategic initiatives that we have been speaking about for a couple of years now in terms of securing level playing field for the bank with

2:36 our Swedish peers as in moving the bank from Norway to Sweden activating our Swedish banking license and actually then becoming then a fully licensed Swedish bank. In addition, we also moved, as most of you would know, we moved our listing from the stock exchange in Oslo to the main list of Stockholm or in Stockholm of Nasdaq. this is also an important move as it does indeed strengthen our access to the to the Nordics largest capital markets which we will we're about to tap into as we as we go forward now and look at the the other big strategic things that happened in the market which with the announcement of our acquisition of mid Meribank and again maybe one step back when we when we move the bank to one of the main reasons why we move the bank from Norway to Sweden was to as I said secure level playing field also in terms of the regulatory environment And what that actually means is that we have now a set of different regulatory requirements, also when it comes to capital requirements.

3:50 When we became a Swedish bank, we managed to free up quite a lot of capital. We talked about our excess capital for a few quarters now. That excess capital is now in the same quarter as we actually managed to free that up, deployed directly into a very strong strategic acquisition with Midmera Bank. What Medmera Bank will do to the combined bank going forward is to actually increase our loan book by around 65%, which again then will take our lending book post integration of Medmera to close to 30 billion, which will kind of position us as a top three player within consumer loans in the Nordics.

4:37 As I alluded to, we will be tapping into the capital markets with a new share issue. We are currently planning to do that in June, alongside with issuing of both AT1 and Tier 2 bonds. We'll come back to that in a minute. With the integration or the acquisition of MedMera Bank, we have lifted our medium-term ambition in terms of EPS growth. And we're quite confident when we are now communicating an ambition to more than doubling the EPS by 2028. Looking at some of the other KPIs across this page, you would see I already mentioned we grew year-on-year by 23% organically.

5:25 We had a cost-income ratio of roughly 25% if you take out some of the one-off costs related to both moving the bank to Sweden as well as acquiring or the process of leading up to announcing the acquisition of Midmera Bank. Erik will come back to that in a minute. looking at a credit risk and loan loss levels. We've always communicated that we have a target to be somewhere between four and a half, which is also where we have been the last few quarters. And we came in with a solid 4.1% loan loss ratio for the quarter. Earnings per share is a mathematical thing, obviously, but came in then at 0.26 or 0.26 euros for the quarter. Now, moving on for those of you a bit new to the case, what is it that actually Morobank does? We are a focused product specialist within the Nordic consumer lending sector. We provide consumer loans, credit lines, credit cards, and also savings and deposit accounts across the Nordics.

6:41 Our typical customer would be somewhere in the 35 to 50 year old, have above average income. and the loans that we give out would typically be around an average of 150,160,000 kroner. Again, typically used for a type of home improvements, a new kitchen, refurbishing the bathroom, even some used car in terms of how the customers use their loans from us. looking at the market we target them, the market for unsecured lending across the Nordics, and when I say Nordics, I refer to Sweden, Norway, and Finland, is around 600 billion Swedish kronor. So it's a large market for unsecured credit.

7:26 As I said, with the acquisition of Medmera Bank, we will be at around 30 billion in terms of our own loan book, which then translates to a 4.5%, 5% market share. so still it's it's a good market share but still quite quite a bit of room to grow within our existing products and markets now taking a bit of a sort of longer perspective looking at the the journey that we've been through with the bank also a bit repetition here for for those of you who know as well but we we know that there are quite a few new interested parties listening in to our calls now as we've moved to Sweden taking a bit sort of historic view where the bank was initially listed in Oslo back in 2017 had some good growth in the start went a bit sort of sideways especially during the pandemic but since now about four years we have Restarted quite a bit around the bank.

8:32 We have built a very scalable banking platform, which is then demonstrated by the fact that we have almost doubled our lending book. We have also managed to take on acquired volume through acquisition of performing portfolios. We've done very much around sort of building a much more scalable platform, which then enables us to to deliver strong growth in terms of lending, but as we will see on the next page, also very strong results in terms of actual returns. Now, we put now Medmera, the acquisition of Medmera as well on this page. That is a, we would say a a strategic natural next step.

9:19 We have always been talking about the fact that size matters in this sector. That's why we've had so much focus on growing the bank over the last few years, both organically and inorganically, and also a lot of focus, obviously, on doing that as profitably as possible and as efficient from a cost perspective as possible. Now, Medmera will be a leap step forward for us where we add on about 65%, as I alluded to on the previous page, in terms of lending book growth when we complete that acquisition. So it's a natural next step on our growth and development journey. As I said, one thing is to deliver lending growth and growing our lending book to close to 30 billion with Medmera. But if we look back at the same period and look at what we have also managed to then deliver in terms of bottom line results, here illustrated by earnings per share, we see that we have definitely outperformed the market also in terms of earnings per share development with a CAGR of 42% over the last three years versus a peer average around 15. That is obviously then, as I said, driven by the fact that we've seen a very strong long book growth.

10:44 We have managed to also do three acquisitions during the period of a total around 3 billion Swedish kronor that we've added on to that growth, as well as worked very hard on streamlining and building the scalable banking platform, taking the cost-income ratio from far above 40% in 2022 to now around or just under 25%, as we reported for the quarter. again demonstrating this scalability where we are able to grow organically, grow inorganically through acquisitions without adding too much cost to the platform. And obviously the result is then that we are able to deliver a fairly strong EPS growth over the reporting period. Now, I guess with everything that's happening in the world, we need to say something about the macroeconomic environment across the Nordics and the outlook, and here represented by the Nordeas Economic Outlook and their numbers.

11:55 Obviously we all look out the same window and see that there's a lot going on in the world and a lot of uncertainty. I think we're lucky to operate and live in the Nordics where we currently see a stable outlook across the macroeconomic KPIs that matter most for our type of business. and that's represented here through looking at growth, GDP growth. There is a positive outlook for the markets overall with about a 2% growth. Growth is definitely good for our business. That means that demand will stay strong, demand for our type of products to finance some of what drives the growth.

12:41 So we look positively on the growth outlook. interest rates We we obviously have three different markets Sweden and the euro area moving fairly fairly aligned whereas Norway continued to be quite a bit above on interest rates. What we have seen historically is that when interest rates go up, we are able to compensate that through interest rate adjustments on our products. So the fact that even in Norway, it was announced a 25 basis point increase in interest rates last week, we're not too concerned about that. We do believe that we will over time manage to to even that out. Euro and Swedish interest rates also moving slightly up. But with these levels, we are quite confident that we will be able to protect our margins over time.

13:42 Unemployment, this is for for many industries and definitely for our industry as well, an important factor to monitor closely. Unemployment over time obviously could, if unemployment goes up, could impair some of our customers' ability to repay their loans. But there again, on the outlook, we do see a stable to actually somewhat positive trend in Sweden and Finland on unemployment. Again, this is the picture today. Things could definitely develop globally and things could sort of also impact the real macro economic environment in the Nordics over time. But as we see it now and basically based on the feedback that we or the data that we have, we're not concerned about sort of the macro at the moment. We believe it's a fairly stable environment for our type of business.

14:45 now we actually believe that the biggest thing that happened in the first quarter was the acquisition or the announced acquisition of MedMera Bank so we'll spend a few pages on that together with Erik we've been out obviously talking quite a bit about that in the market but again as I said we know there are quite a few new people listening in today so let's recap a bit on why we believe the acquisition of MedMera Bank is a is a very important and transformative strategic move for the bank. Now, I guess I've already alluded to some of this, but the acquisition of Medmera Bank is a natural continuation of our M&A strategy.

15:31 Over the last year and a half, two years, we've gone into the market and done some M&A. We have... We have had focus on Sweden already. We have acquired performing portfolios here represented by the three acquisitions, Clio, Luna and Moag of total 3 billion Swedish kronor that has lifted our growth and had a very good and solid impact on our overall KPIs. that made us actually quite confident to now go into the market and do our largest largest acquisition to date with Midmera obviously slightly different the three first acquisitions were portfolios performing portfolios that we acquired By the way, we managed to onboard that and make that actually accretive to our overall business performance. Made us quite confident now to go in and do a bigger thing with the acquisition of a full bank. So Medmera Bank, we'll come back to that in a minute, what is Medmera Bank, but what it will do.

16:36 to our performance is lift our size by about 65%, both in terms of lending balance sheet as well as bottom line results. So again, a very important strategic move for the bank. Now, I think it's important also to say a few things about what is Medmera and why does that present an attractive strategic fit to us. Medmera Bank operates largely in the same segment as us. It's unsecured lending, but I'll come back to there's still some differences. And we tried to lay that out on that page.

17:21 It is, as I said, a A market we know, Sweden, it is a segment we know, unsecured credit, but what Medmera has built is a pure Swedish bank and a Swedish present. We have moved our bank from Norway to Sweden. What Medmera gives us is obviously a larger, deeper, broader Swedish footprint and solidifies our presence in the market. Morobank, as you know, has presence across Sweden, Finland and Norway. So we are broader in terms of market reach, but Medmera deeper in terms of the penetration into the Swedish market, which is a strategically important market for us.

18:08 We both provide consumer loans. Morro Bank does have credit cards in addition that obviously presents a potential opportunity as we get access to a better customer base. Looking a bit at segments, this is important as well. Even if we target or we operate in the same market with roughly the same products, we have been targeting slightly different segments. We can call with Medmera targeting more against the prime consumer lending target, whereas we have been focusing mostly at Moro towards what we call a near prime segment. So adding Medmera to our mix will broaden the reach also in terms of segments in our sector, especially in Sweden. and that's reflected again with the next couple of parameters there when you look at the average interest rate they they price lower we price somewhat higher here represented by six percent and ten percent but again what matters most in in this industry is obviously the risk adjusted margins and we look at credit losses at morrow bank as we just reported around four percent whereas the risk appetite's been lower in midmera and they've been operating with a risk appetite around 2%. So again, that's just illustrating that we have been targeting slightly different segments. Combining these two banks together, it's very important to understand as well, we will continue to operate the Medmera

19:41 value proposition, the brand as is, and with the intention then to broaden our footprint in Sweden and organically grow both in terms of Moro and Medmera. So with that, Erik, you can take over and talk a little bit about the numbers around Moro or Medmera.

20:02 Thank you, Evin. Exactly, into the numbers. The nice thing with Mera is that it adds substantial size to us, and you can see it here. Based on our 2025 figures, our combined total income would actually have been almost 2 billion Swedish kronors. If we're looking forward into 2028, we will continue to grow both banks' loan books, and thereby also we should see a further lift on the total income line. Now, as to the OPEX, there are clearly synergies between the two banks. We are looking at a couple of different alternatives as to how to achieve them, but what they have in common is that they both will expectedly give us synergies or cost reductions. In 2028, that will be around 150 million Swedish kronors or more. So if you combine that, you can see that with a larger loan balance and lower cost base, we will see that we will be at a cost-income ratio which will be down to 20%, which is obviously better than both banks are today.

21:09 Now bringing that into the bottom line performance on the bank, you can see that with this increase in both scale as well as a relative cost reduction, we will now target a return on target equity which will exceed 20% when we come towards the end of 2028. And this also will translate to an earnings per share, which in 2025 was 1.1 Swedish kronor per share for Morobank. On a combined basis, this will be now more than doubled. You can do the math. You can see that there is plenty of space above more than doubling. And finally, combining the bank and with the capital or with the financing, which I will come to very shortly, you can see that this will also optimize our capital structure with a CET1 ratio in 2028 of 13%, which we believe is given our requirements and the risk we are operating with is pretty much an optimal level.

22:12 The total capital ratio will be 17%. Now, looking at the financing structure of Medmera, we are paying 1.96 billion Swedish kronors for Medmera Bank, with an expected closing in early July this year. We're financing that by having issued 392 million kronors worth of shares to the seller. we are raising around 600 million kroners as new equity we're planning to do that in June so basically a few weeks from now as well as leveraging the possibility to issue bonds and thereby not diluting the shareholders that's around 500 million kroners And finally, from spare capital that we have, coming to that as well, we will also be spending 470 million Swedish kronors. And in a way here, you can see that we are financing a deal which is amounting to 2 billion kronors with just new share issue and dilution of the shareholders of only 1 billion kronors.

23:20 So in a way, this will be a creative to the shareholders in the bank. Now, from this prospective view of Medmera and Morobank combined, we will take a retrospective view on how Q1 was on the financial side for Morobank on a solo basis. Now, starting with the normal loan growth, Even if we have been spending quite a bit of time on Medmera in this quarter and obviously now going forward, we still have maintained the growth. As Eivind has described earlier, our loan book ended at 18.1 billion Swedish kronors. That's up 1.2 billion or 7% during the quarter. We were a little bit helped here by the foreign exchange in the sense that the Norwegian krona in particular became stronger towards the Swedish but also here we had a good demand from our customers and that also enabled most of the growth.

24:17 Year on year we have increased by 3.2 billion on consumer loans and almost 200 million on credit cards. We have announced an NPL sale of non-performing loans in the first quarter we announced it. This has taken place in April. It is included in the gross figures you see here because that is as of March 31st. But in April, that has gone out on our loan books. And as we know, this was an accretive sale. And also, this will improve our asset quality as well as the capital ratio. And going forward, we will continue with our organic growth. And we also will, as Evina said, if there are opportunities on M&A, we will also look at that.

25:08 Now on the margin side, we're seeing that it's a bit of a more combined picture. The loan, the yield on the performing loan has gone down quarter. If you look on the from the last year's quarter to this one, it was fairly stable versus the Q4. But this is a result of the overall decreasing rates in the market, which is also impacting us. However, what has also impacted us this quarter is the fact that we had to increase our funding cost, and that is more on the technical side. First of all, most of the loan growth that took place in Norway, and as you know, the Norwegian rates are much higher, they're double more or less, than what they are in Sweden and Finland, and as such, we need to raise more deposits to fund that. In addition, we have an accounting technicality When we moved to Sweden on the 2nd of January, we needed to convert our equity from Norwegian kroners to Swedish kroners.

26:09 That implied that we needed to replace the funding of Norwegian loans with customer deposits instead of equity. And as I mentioned, the rate on the Norwegian kroners is high, twice as the Swedish kroners, and that has also impacted our funding rate. And finally, we needed to raise more Norwegian kronors as well as Swedish kronors because we need to fund the MedMera acquisition. And that has led us to us being more aggressive in the deposit market, thereby increasing our rates. And that has also contributed to a higher rate. We have now achieved this liquidity build-up and we are therefore softening our rates actually in both the Norwegian kronors and the Swedish market despite the increase in the Norwegian kronor underlying rate.

27:03 As one word on the Norwegian underlying rate, Yes, that has increased now. It was announced last week that the Central Bank of Norway increased the rates. We have also increased the rates on most of our Norwegian customers. We have announced that, and that is also taking place with the normal warning times that will be effective as of July. If we look at, or one more thing here, when we look at Medmera, as we have seen earlier, the yields on the Medmera loans are lower. That will also contribute to a lower lending rate, but it will also give a lower deposit rate because we're now funding that in Swedish kronors. And as also seen, the risk-adjusted margin will be protected because the loan losses on the Medmera loans are lower.

27:57 On the total income side, combining the loan balance growth as well as the net interest margin and other items, you can see that we had an increase year on year of 11%, and where also the other income was 22 million. As usual, that is net fees and gains on securities and certificates, and also the commissions, as you can see here. On the OPEC side, we're seeing that we had a slight nominal increase in this quarter here. And that is compared to last quarter. And that is essentially driven by the fact that we have spent quite a bit of resources on the mid-mare acquisition, as well as on overlay from the move to Sweden. the last thing we announced when we presented our Q4 figures that we had cost related to that from the move to Sweden and now on top of that we have a cost related to the acquisition of Medmera so in total we have one-offs here of 13.5 million kronors so basically we're down to roughly 90 million kronors in underlying OPEX Also, we had a small hit by the FX because most of our costs are still in Norwegian kroners.

29:19 And as the Norwegian kroners strengthened, that also had an effect of roughly 2 million kroners. But overall, we're having a good cost discipline. Our cost base is stable. The cost-income ratio is a little less than 25% when you exclude the one-off. and as said earlier here, combined with Melmera, we are looking towards going down towards 20% once integration has been completed and we've grown a bit further. Now, as to the loan loss side, we're delivering in where we basically have been guiding. We have been guiding that we probably would be between 4% to 4.5% in loan losses.

30:06 We landed this quarter at 4.1%, which we're quite happy with, slightly up from previous quarter of 3.9%. But again, first quarter in consumer finance is usually a bit softer than the remaining quarters. The loan loss picture is stable. When we add in the Medmera, you can see that the low risk of the relatively large Medmera portfolio will bring down our average loan loss ratio, and we therefore would have in 2025 on a combined basis had a loan loss rate of 3.2%. Now, combining these factors, total income growth, costs, and loan losses, you see that we have an increase in the pre-tax profit to 87 million kroner year on year. Now, as you know here, we also have 13.5 million in one-off investments, and if you disregard that, we would have been above 100 million kroners.

31:03 The after-tax now with the one-offs is 68 million kroners, so an earnings per share of 0.26. And a return on equity is 10.7%, or as we like to talk about, the return on target equity. We'll come to that in one slide. 14% almost, demonstrating that we are essentially spending our capital wise and growing our business well. Going forward, we will more than double the EPS. That's what the expectations are, given the increase in income and the cost improvements and loan loss development, and also thereby achieving a combined return on target equity above 20% when we come to the end of 2028.

31:54 Finally a word on our capital situation. As you can see here on the blue part of the bar that is the CET1 requirement. You can see that moving from Norway to Sweden has given us a nice decrease in the requirement. At the same time, the overall CET1 ratio has decreased. That is because we're actually growing quite healthily. We had a 23% increase in our loan book growth year on year, as well as we made a dividend payment in 2025. so therefore our total capital ratio has decreased but given the fact that we now have lower capital requirements you can see that our headroom has increased from 5.4% to 5.7% and of course as mentioned earlier we will employ quite a bit of that on the MIR acquisition And with that in mind, we maintain our view on capital allocation.

32:52 Number one, organic growth. Two, accretive loan portfolio acquisition, as they occur from time to time, with Minmera being a very good example of that. And then three, once we pass that, if we have something left, we will return it to the shareholders. Obviously, as we announced, given the Minmera transaction, we're raising capital. We did not pay a dividend in 2026.

33:18 Thank you so much Erik. Before summing up and opening up for questions, let me just fly by on this page. We're quite competitive at the bank and we like to compare ourselves to our peers and stretch ourselves towards the best in-class. And just quickly on the table here, we've sort of used this page for some time now. And as you would see, we're now at 18 billion loan book peer average, slightly higher than that, driven by one big player in the space. I won't mention the name. But maybe more importantly, if we look at growth then in terms of the loan book, we see that the last three years we've delivered a CAGR growth of 24% in terms of loan growth, whereas the peer average is around 15%.

34:17 cost-income ratio continued to be very, very strong at Morobank. And as we heard from Erik, we haven't stopped here. We continue to work that towards 20% over time, even if it does represent, if not best in class, we're not far off. EPS growth, again, I had a separate page on that earlier in the presentation. Looking at that also and benchmarking that against peers, we do outperform. We have delivered an EPS growth average of 42% over the last three years. So again, what we've seen by moving the bank to Sweden, we have secured a level playing field with our peers. Now this is a fair comparison, Swedish bank to most of the other Swedish banks, and we still continue to perform or outperform when we compare.

35:20 Now, last page today. It was a longer presentation because we had much to talk about, especially around our M&A and announced acquisition of Medmera. But let me try and summarize, as I said initially, a very exciting quarter for the bank. a transformative quarter for the bank where the fact that we free up capital as we now have redomiciled and listed on Nasdaq Stockholm we did get lower capital requirements and hence freeing up capital that we can deploy into a creative M&A which we already did in the first quarter with the acquisition or the announced acquisition I should say of Medmera Bank that will lift our lending or loan book by 65%. And also, as we've seen through the presentation, improve our financial KPIs significantly.

36:21 Looking at the more sort of in-quarter performance, we see that we continue to deliver strong organic growth with about 7%. 23% a year on year there is a continued healthy demand for our products across the Nordics we are optimistic that we can continue to deliver on our growth trajectory and last but not least when looking a bit further out especially also taking in the acquisition we believe that our ambition to deliver return on target equity above 20% in the medium long term that is by end of 2028 is now even more confident that we will be able to deliver that with the M&A initiatives and last but not least what I will actually do is to continue to grow our EPS and more than double our EPS we believe by end of 2028.

37:24 So that's all we had in terms of presentation. I guess we will now take some questions. thank you very much for that presentation and if you're calling in and have any questions please press star 9 to raise your hand and star 6 to mute yourself when you get the word you can also submit written questions using the form to the right and we'll start with a written question here could you provide more details regarding the plan equity race and what that means for existing shareholders

37:58 We are planning to raise, or to put it this way, the seller of Medmera Kooperativet Förebyn will have a new share issue as part of the settlement, so we don't need to pay cash for that for 392 million Swedish kronor. That is already agreed. But we're also planning to raise another 600 million kroners. This will most likely be taking place as a so-called private placement where we're seeking out larger investors. And there we will raise the amount. But again, here, this acquisition is what we consider accretive. We're getting a company which is valued at 2 billion kroners, a book value, and we're only paying 1 billion kroners for it in equity.

38:44 When you are guiding a 100% increase in EPS by 2028, does that apply to the whole year of 2028 or only Q4 in that year?

38:54 That's to the whole year, and more than 100% I would like to add. Thank you for that answer. Could you give some more details to the 150 million synergies take-out path and how much we should see in 2027?

39:10 Well, to start with the last part of the question, now in 2026 and 2027, those will be transformative periods, meaning that we will probably not see as much synergies there. We'll be spending the time and money in order to rearrange our business. as to end of 2028 when we have achieved this transformation there will be efficiencies arising from doing from the combination that mean we will see more efficiency in relation to employees I mean we will need less employees to perform the same job we will have efficiencies related to the fact that we will having less systems less overheads less costs less administration etc so it's a combined of all those items.

40:00 Thank you. You show a weighted average 2025 loan loss ratio of 3.2% including Medmera, but you do not appear to have updated your loan loss ratio guidance. Is there a reason for keeping the guidance unchanged despite the lower risk Medmera book?

40:18 To put it this way, we did not give any guidance now for ourselves. That was the guidance that we have given that was before the Medmera acquisition and that was on solo basis for Morro Bank. Obviously, when you combine Medmera and Morro Bank, we will provide a new guiding. It will, by all accounts, be lower given the risk of Medmera transaction, but we have not yet such given a formal guiding. The 3.2% is a performer for the 2025 combined. Based on your scenarios, how much additional scale or M&A in terms of loans would be needed after the Melmöre acquisitions for scenario B to become relevant?

41:03 Good question. I think the question relates to a page that we didn't bring up, but it's in the appendix. And we talked about the various scenarios previously in terms of what we could deliver in a scenario where all excess capital go to dividend. We take it out of the bank versus if we deploy it to a creative growth scenario. And now we've basically taken all the excess capital that we had. We'll bring it up the page. You flipped. You jumped over it. There you go. So again, I mean, with the acquisition of Medmera, we're obviously getting much closer to scenario B. We do believe that both banks have the potential to grow organically going forward. Obviously, we will be generating excess capital as we go along. And Erik communicated our capital priority that remains the same. If we do see a creative M&A as in buying or acquiring performing portfolios, we will deploy capital against that.

42:12 So the more we deploy of the access capital towards a creative growth, the more we will realize against what is an illustration on this page labeled scenario B. So we're executing on a scenario B rather than a scenario A, especially with such a large acquisition as we've seen this quarter. Thank you for that answer. And how many shares roughly will be outstanding after the deal with Medmera is done in early Q3?

42:46 It obviously depends a little bit in terms of how the placement will be priced. But rule of thumb, I think the number, the amount of shares will increase by roughly 30%. How do you see the competitive environment across your markets currently? Because you mentioned that growth in Norway dragged down margins due to structurally lower yields. Given this and the Bedmera acquisitions, where do you see the most attractive risk adjusted returns to Allgate Capital currently?

43:20 Very good question. And again, I think what we have demonstrated over the last few years is that we have been able to deploy the capital available to growth to where we see the best returns. We have had a focus on the Norwegian, especially the Norwegian refinancing market the last year. almost a year, autumn into this year. We've seen good results out of that. We've seen that competition has picked up a bit in Norway recently, and we've seen nice growth again in Finland. With the Medmera acquisition, we obviously, as I said, triple our lending book in Sweden and can broaden also the segment reach in Sweden. And I should also say that with the Medmera transaction, we also get an exclusive distribution agreement with Coop to sell our type of products to their membership base of 4 million customers.

44:28 So I do think we will see more growth in Sweden going forward, especially as we onboard Medmera. But both Finland and Norway remains an important market for us, and we will deploy capital always where we see the quality best bang for the bucks. Another question here. I understand that the shareholders can't expect dividends in 2026, but can you give some details about when and if we could expect dividends?

45:03 Good question. We have given our capital allocation priorities. Now we're raising capital in order to acquire Medmera. We will be quite well set in terms of capital for that. Should our development after the acquisition of Medmera just be on an organic base, there could be room to make a dividend payment in 2027. However, there are many unknown variables at this time, being that we need to see how the Medmera acquisition lands. There could be also other opportunities. There could also be that the market prospects for growth are better. So this will be a decision that we will have to look at in early 2027.

45:49 Thank you. How much does a 0.25% rate increase in Norway affect your interest income and also your interest expenses?

46:02 If I remember correctly, we have about 5 billion Norwegian kroners in Norwegian deposits now. and the 0.25% there is 12.5 million kroners, if I do my math correctly here, on the fly, on an annual basis, pre-tax. If you are alluding to the rate that we have, that was increased by Bank of Norway, we were already quite well placed in terms of, on the competitive scale when we look at the others. So if the others now increase, will probably be at the same rate. So there's not necessarily given that we will see an increase in the funding rate in Norway going forward. But again, this will be driven by the market.

46:47 Thank you. And that concludes the Q&A session. Thank you very much both for presenting with us here today and thank you for everyone who tuned in with this presentation. Thank you.

46:58 Thank you very much.