Nordea Bank Abp (Helsinki:NDA FI) Q3 2026 Earnings Call

0:00 Good morning and welcome to Nordea's third quarter 2026 results. I'm Ilkka Ottala, Head of Investor Relations. As usual, we'll start with a presentation by Group CEO Frank Vaniese, followed by a Q&A session with Frank and Group CFO Ian Smith. Please remember to dial into the teleconference to ask questions. With that, Frank, please go ahead.

0:40 Good morning. Today we have published our results for the third quarter of 2026. Nordea performed well again this quarter. We grew total income year on year. We further expanded our customer base and delivered strong growth in savings and investments. Fee and other ancillary income were strong. Net interest income rose both year-on-year and quarter-on-quarter, despite lower mortgage margins and foreign exchange effects. This was a solid performance in a seasonally slower quarter. The result underlined the strength of our business and the good progress we are making with our strategy execution across all key initiatives.

1:25 Geopolitical uncertainty and volatility remain high. However, European countries in general and the Nordics in particular are navigating higher energy costs and other challenges well. Growth expectations for our four-hole markets have improved. Structural changes on the way in Europe's economy are creating significant opportunities. And Nordic corporates are well positioned to capture them. Growth is being driven by substantial investment in areas including artificial intelligence, defense, infrastructure and energy transition. We expect continued economic growth by corporates and gradually improving household consumption across the Nordics. It is encouraging to see growth now also picking up in Finland.

2:17 At the same time, we are mindful of the recent sharp increase in forward rates and the potential for higher rates to affect consumer confidence in the month to come. In this environment, Nordea is uniquely placed to serve our customers with our sector expertise, enhanced customer offering, including digital services and our strong balance sheet. In short, by leveraging our Nordic scale. And we continued to do just that in the third quarter, supporting our customers and driving business growth. Let's take a look at the highlights. Beginning with our return on equity, which was solid at 15.1%, amid seasonally more subdued activity levels.

3:10 Earnings per share were 35 euro cents, broadly stable year on year, Total income was up 2%, driven by a 9% increase in net fee and commission income. We continued to see high demand for our savings and investment products, which together with strong investment performance increased our assets under management by 13% to a record high of 509 billion euros. Net interest income continued to steadily improve in line with our expectations and was up 1% both quarter on quarter and year on year. Strong volume development was the main driver with corporate lending up by 8% and deposits by 7%.

3:56 In households, mortgage volumes increased by 2% year on year and deposits were up 4%. Net fair value was down 19% due to the extraordinary interest rate volatility late in the quarter, while customer activity was solid during the seasonally slower period. Our cost performance is strong with costs flat year-on-year, excluding FX effects. Our credit quality is also strong. Net loan losses and similar net result corresponded to seven basis points, well within our long-term expectation of around 10 basis points. The losses were driven mainly by a limited number of individual provisions on corporate customers.

4:42 Our CET1 ratio was 15.8%. At the end of the quarter, 1.9 percentage points above the current regulatory requirement. This reflects Nordea's strong capital position and capital generation and supports our strategic priority to deploy capital for profitable growth. Nordea's strong balance sheet and Nordic scale play an important role in the growth of its customers and Nordic societies. Our performance is reflected in the full year 2026 guidance, which is unchanged. We continue to expect a return on equity of greater than 15% and a cost to income ratio of 44 to 45%.

5:28 Let's now look at the results in more detail, starting with the income lines. As mentioned, net interest income increased in Q3 despite lower lending margins. During Q3, lending and deposit growth continued to be strong among our corporate customers up 8% and 7% respectively. This demonstrates the close relationship we have with our customers and means that we are at the table when opportunities arise. The development also reflects higher activity and confidence among Nordic businesses and the progress we are making in implementing our strategy. Household customers are also increasing their activity as they have experienced real wage increases and a more moderate inflation rate.

6:20 This combination has increased their willingness to consume and invest. The impact of the conflict in the Middle East and the resulting higher energy prices has so far been rather mild on Nordic consumer confidence. Across the region, households strengthened their savings and investments and that contributed to higher retail deposits, which were up 4%. Mortgage volumes in Q3 were up 2%. This was driven especially by Sweden and Norway. Finland is performing well in a slower market and we are seeing early signs of improvement in Denmark. Our net interest margin for the quarter was 1.53% compared to 1.59% in Q3 last year and 1.54 in Q2. Net fee and commission income was up 9% year-on-year driven by 14% growth in savings income This is encouraging as higher cross sales and savings in particular are key priority areas of our 2030 strategy. Demand for savings and investment products remain strong and our expanded advisory coverage is delivering good results.

7:39 We welcome that significant number of new private banking customers across all four markets, driving strong net flows. Asset management were up 13% to a record 509 billion euros, which was driven by the strong net flows as well as good market performance. Activity remained high during the quarter in debt capital markets, and we helped customers raise capital and execute strategic transactions amid signs of improving sentiment in equity capital markets and M&A. Turning to net fair value, our result was down 19% year-on-year in Q3. Customer hedging activity was solid during the seasonally slower period in FX and rate products.

8:27 The lower market making result was due to the extraordinary interest rate volatility late in the quarter, which negatively impacted asset values in our market making. Cost management was strong, with costs flat year-on-year, excluding FX effects, despite heavy strategic investments in growth, resilience, technology and AI. This would not have been possible without our structural improvements to support productivity and efficiency across the group. Under our 2030 strategy, we are continuing to simplify processes, improve productivity and drive our Nordic scale agenda.

9:12 A particular focus is expanding the use of AI to redesign our core processes and improve the customer experience. The realized savings give us the capacity to absorb inflation and continue making focused investments towards our strategic growth priorities while keeping overall cost growth under control. We are in a strong position to continue delivering positive jobs. The Q3 cost to income ratio was 45% and we are on track to meet our full year guidance of 44 to 45%. Our credit quality continues to be strong. The resilience of the Nordic economies is clearly reflected in our customer base and our underwriting and credit management approach has remained consistent and prudent.

10:06 Household finances remain strong, while corporates are generally well positioned, funded and capitalized. Net loan losses and similar net result corresponded to seven basis points for the quarter. This was driven by a handful of provisions for individual corporate customers and a small increase in collective provisions. The quality of our credit portfolio remains strong and loan losses are well within the Group's long-term guidance of 10 basis points. Our capital position and capital generation is strong and supports our strategic priority to deploy capital for profitable growth. Given we are the largest financial services group in the Nordic region, we play an important role in supporting the growth of the Nordic economies.

11:00 At the end of the quarter, our CT1 ratio was 15.8%. 1.9% is points above the current regulatory requirement. As we have communicated previously, in 2025 Nordea submitted an application to the European Central Bank for approval of new IRB capital models for corporate lending portfolios. Nordea has been in active dialogue with the ECB on the application and the most recent discussions have indicated that additional conservatism in our model outputs will be required. This would increase Nordea's REA and is an update to our earlier expectation of a neutral outcome.

11:45 The timing and impact of any supervisory decisions related to this matter remain subject to our ongoing discussions, and we understand that no decisions will be taken before 2027. In the meantime, we think it is sensible to pause share buybacks pending clarification of the REA impact. Importantly, there is no change in the risk or credit quality of the loan portfolios concerned. Nordea's business model and performance is robust and resilient, and our portfolio is very well diversified across the strong and growing Nordic economies. Our credit quality is strong, as evidenced by the very low loan losses over Nordea's 25-year history.

12:37 And now, let's turn to our business areas. In personal banking, we delivered solid lending growth and generated strong fee income. Customer savings and investment activity remained at high levels across the Nordics. Mortgage volumes were up 2% year-on-year. This was driven by Sweden and Norway. In Sweden, we took 21% of the market growth year-to-date in August, and we continued to grow our market share. Finland is performing well in a slower market and Denmark is showing early signs of improvement. We continue to manage the competition for mortgages carefully while capturing opportunities to grow. Deposits were up 4% driven by growth in Norway, Denmark and Finland.

13:27 Investment product AUM increased by 15% reflecting the high levels of customer savings and investment activity. The share of customers with recurring savings have been increasing over the past three years, and during the quarter, recurring savings in Israel were up 14% year-on-year. In Norway, we delivered a 20% year-on-year increase in savings fee income. This was supported by a stronger integration of savings and daily banking into the onboarding journey for new mortgage customers. This is a good example of Nordea's strength. As customers choose us for a broader range of financial needs, it creates opportunities to offer them a deeper range of products from across the group.

14:15 Net fee and commission income increased by 4% year-on-year, mainly driven by a 12% increase in savings income. Total income in the third quarter was broadly stable year-on-year as growth in the fee and commission income offset lower net interest income. Return on allocated equity was 15% and the cost-to-income ratio was 51%. In assets and wealth management, we continue to drive robust growth in income and assets under management. In private banking, a strategic growth area, we made strong progress across the region in the quarter, with net flows amounting to €0.9 billion. We delivered a 14% year-on-year increase in net fee and commission income, with clear growth in all four countries. This was driven by strong assets on the management growth supported by continued high customer inflow and positive net flows.

15:13 We continue to progress with our strategic ambition to deliver leading digital savings and investment experiences, further strengthening our digital offering to make investing more straightforward for customers. In life and pension, and not a strategic growth area for us, we made 30 strong progress in the quarter across our home markets. We are supporting customers with their long-term savings, pension and protection needs, while making these solutions a natural part of the broader Nordea relationship. Life and pension assets under management increased 20% year-on-year, while gross written premiums in the quarter amounted to 3.3 billion euros, up from 2.9 billion a year ago. Wholesale distribution net flows returned to positive at €0.5 billion, supported by inflows each month of the quarter.

16:11 In business banking, we continued our strong momentum and delivered solid business volume growth across our home markets. Customer growth accelerated in the quarter, and we further invested in our digital capabilities to make Nordea the leading digital bank for small and mid-sized businesses in the Nordics. Lending volumes increased by 6% in local currencies year-on-year, led by Denmark, Norway and Sweden, while growth also picked up in Finland. Deposit volumes grew by 2% and were also up in all markets. We made good progress in our focus on entrepreneurs and small businesses with the number of new customers joining there increasing by 58% year on year.

16:59 Our focus is on making the onboarding process more user-friendly, leaner, and more automated, harmonizing our offering across the region so entrepreneurs and small businesses get up and running more quickly. During the quarter, Nordea Business and the mobile app won global finances award for best corporate digital bank and best mobile banking app in each of our four home markets. This is the fourth consecutive year that we have gained this recognition. Total income in the third quarter increased by 5% year-on-year, driven by volume growth and higher ancillary income, while assets under management were up 18%.

17:46 Return on allocated equity was 15%. The cost-to-income ratio improved to 44% from 46% a year ago. In large corporate institutions, customer engagement remained high, and we drove further progress in our strategic growth areas. We strengthened our customer offering in investment banking and payments, streamlined processes and scale AI adoption across the businesses. Lending growth remained strong across all four countries, increasing by 13% year-on-year and reflecting higher investment activity among large corporates in the Nordics. Deposits were also up 13%. Net interest income increased 7% driven by higher lending and deposit volumes.

18:36 Net fee and commission income increased by 6% with particularly strong performance in lending and asset management fees. In debt capital markets, we arranged more than 150 market transactions in the quarter, significantly higher versus a year ago. Activity also showed signs of picking up in equity capital markets and M&A, where we continued to help customers raise capital and execute strategic transactions. Secondary equities continue to deliver year-on-year growth. Total income was down 6% year-on-year despite solid customer activity, as the extraordinary interest rate volatility late in the quarter adversely affected our market-making business.

19:24 These type of large moves have a negative effect on the inventory of the bonds we hold to facilitate our customers' businesses. Return on allocated equity with also amortized resolution fees was 11%. The cost to income ratio was 43%. To sum up, Lodea performed well in the quarter. We grew total income year on year with high lending and deposit activity in both corporate and household segments and delivered strong growth in new customers and across our products and services. The results underline the strength of our business and we are progressing well in our strategy execution across all key initiatives.

20:12 We go into the fourth quarter with good business momentum. We continue to expect a return on equity of greater than 15% and a cost to income ratio of 44 to 45%. The Nordic economies are showing their strength and resilience and Nordea, with its unique presence across the region, is well equipped to support our customers and the societies in which we operate. Our 2030 ambition is to become the undisputed best performing financial services group in the Nordics. We are moving in the right direction. Thank you.

21:17 Operator, we are now ready to take questions. And if I could remind, please, everyone to restrict yourself to two questions so we get through the queue as well. Thank you. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Gulnara Satekulova from Morgan Stanley. Please go ahead.

21:56 Hi, good morning. Thank you for taking my questions. Could you confirm the current average risk weight on the corporate portfolio which is subject to the ECB review? And also, what proportion of the non-retail book is covered by the review and which specific segments or exposure classes are affected? Should we assume that the entire corporate portfolio is potentially impacted or is the review limited to certain portfolios? The reason for asking is that if we, for illustrative purposes, were to apply the average corporate risk rates of European peers to Nordea's entire corporate lending book, the resulting increase in REA and capital impact could be quite material. That's why understanding the precise scope of the ECB review, including the proportion of the portfolio affected and its current risk rate density, could be very useful. And what are the mitigating actions you're considering to manage the potential capital impact? In particular, are you planning further SRTs and can you potentially change your risk appetite when it comes to lending?

22:57 Thank you.

23:00 Good morning Gulnara and thank you for the question. I think the first thing is we're not going to speculate on the outcome. We are reporting today two things. The first is that recent discussions with the ECB indicate that they want to see more conservatism in the output from our risk models for corporate, and as a result we think it's sensible and prudent to pause buybacks. That's the key information you should take from today. The scope of the ECB review is amongst – it covers our most important portfolios, but we're not going to talk about details of the review or any other related matters today.

23:54 In terms of the average corporate risk weights, I'll get IR to get back to you on that one because I want to ensure that you get it precisely. But the main message from today is we can't talk about outcomes. And the main thing to note is that we've paused buybacks pending clarity of the REIA impact.

24:23 Thank you. And what about the mitigating impacts potentially apart from the buybacks? Do you think you can potentially do further SRTs and do you expect any potential impact on the risk appetite and the capital allocation towards lending growth in the near term? Should we expect a more selective approach to new lending or potentially some moderation in long growth until there is a greater visibility on the capital impact from model review? Thank you.

24:51 so again Gulnara I'll take you back to what we've said today the action that we're taking is to pause buybacks it's a prudent decision on discretionary capital distributions and it's not a signal that we intend to constrain business growth the business plan includes profitable growth and our capital planning always takes that into account we're there for our customers and we haven't changed our business plans thank you The next question comes from Shrey Shrivastava from Citi. Please go ahead.

25:38 Are you there, Shrey? The next question comes from Martin Ekstedt from Handelsbanken.

25:47 Please go ahead. Hi, can you hear me? Yes, we can, Martin. Good morning.

25:54 Good morning, Ian. So you said in response to the previous question, and I'm sorry to come back to the IRB model, you say you will not speculate on the outcome, right? But we as analysts, we kind of have to speculate on the outcome, as I think the previous question highlights quite well. I mean, is there any guidance you can give us to follow this down a little bit for us? At this point, it's an open-ended, unquantified regulatory risk. So any guidance you can provide us would be quite helpful. Just to double check, is it specifically probability of defaults or loss given default or model methodology that is driving this? Is it related to any particular sector? Anything you can give us to clarify would be super helpful.

26:39 Yeah. Thank you Martin and I understand what's behind the question but please then also understand we're in active discussions with the ECB we've got different views on some key issues and we accept their position on others and that's why we're in Abp Bank Abp Finish NII was up 6% in business banking and 7% in personal banking quarter-on-quarter.

27:50 but with very little actual lending growth, which implies quite good net interest margin improvement. But what drove this, and is it sustainable? Finnish fee income was down 6% in business banking, and 11% in large corp. It may be partially down to seasonality, but it doesn't point to, for example, a surge in corporate activity. Could you just talk a bit about the Finnish markets and what you're seeing there currently and the trends?

28:16 Yes, of course, Martin. So as you point out, a good performance in both of those divisions in Finland. The key driver has been deposit margins, which have been positive, particularly on the retail side. So I think it's good to see that. So both volumes and margins contributing on the deposit side and steady margins, I guess, on the asset side of the balance sheet. And then in terms of fee income in our corporate businesses, it was a slightly slower quarter activity-wise, particularly in relation to corporate transactions and things like that. I think it was seasonal.

29:07 Certainly no indication of corporates taking a step back or something like that. So I would take it as seasonal. So good progress in Finland. Deposit margins helping very much on PEB and business banking. And then activity levels a little bit slower coming out of the summer.

29:31 Okay, thank you. And then quickly, if I may end with a quick confirmatory question. So on your Danish AML court case, the Danish court scheduled the verdict for 9th of November, but they just not named the defendant, just saying it's a bank. Could you confirm if this relates to your case?

29:53 Yes, it does, Martin. So that's the date that we expect to get an outcome of the initial court case. So you're correct.

30:03 Excellent. That's all from me. Thank you. The next question comes from Jacob Haslevic from SEB. Please go ahead.

30:14 Good morning. Your CMD plan for more than 20 billion euro of distributions in 2026 to 2030 assumed 4 to 6 billion euro of retail model real relief and nothing from non-retail with only 40 points above your 150 bits buffer and now retail, non-retail now a headwind. Does that ambition still hold and is the retail relief still on track for end of 2027?

30:44 Hi, Jakob. Thank you for the question. So you'll see from today there's no change to our guidance. Our short-term outlook for the rest of 2026, we continue to expect greater than 15% ROE and a cost of income 44% to 45%. We've also reiterated the 2030 targets, which I guess is the key message at the moment. No change to our guidance or targets at this stage.

31:15 Got it. Thanks. And looking at LC&I Denmark, it has taken 99 million euros of loan losses year to date. Is the legacy customer case the same name each quarter? And if so, how much exposure is left?

31:30 so it's not the same story so in each of our quarters where we've seen these instances it's been different positions so it's not a I guess a cumulative position and these things fall where they fall but it's well known it's well known names and

32:00 They are Danish, but resides within one of our specialist areas. Well-known names and increasing provisions according to the performance. But just to be certain, we get it clear, there's no deterioration of the credit quality in the Danish business. It's super strong. but there are a couple of customers that struggle and we have followed them closely for quite some time.

32:33 Sounds good. Thank you. Thank you. The next question comes from Shrey Shrivastava from Citi. Please go ahead.

32:43 Hi, I'm sorry about previously, I don't know, my line just cut off. I have one question, which is that we saw a ruling yesterday on one of your peers saying that their rear add-on reduced the risk to gain an undue competitive advantage versus other market participants. Now, with the knowledge that you can't comment on specific players, just in terms of general market dynamics, The players that have been winning market share in this market over the last year or two, what exactly have they been winning on? What have you been winning on? Is it quality of service or has there been certain sort of products that you've cut pricing on in order to gain the broader relationship and so on? So I'd be really interested in hearing that.

33:30 Thank you very much.

33:32 Thank you for the question. Frank speaking. I would say it's very dependent on which segment and which country, and thereby due to the competition. Prices for a very large part of the broader market, i.e. household, SMEs, especially the small segment, and then to some extent small corporates as well, the market is super transparent across the board in the Nordics and that means that the prices are not what of course you can win on price but if you win on price it's usually not sustainable so it is about using your entire size using your capabilities expertise and then speed is important so Insure that you are there when the customer needs you and want a response.

34:28 That goes especially on mortgages. On smaller and mid-sized business, of course, it's more relationship-based. What can you offer? How can you do it? How sharp are you? What is the accredited services and so? So that is a totality. Our view has always been that we are a relationship bank, and when we enter a deal, it is to be the main partner across all needs. Then the dynamic in each country is, of course, unique in each country, so depending on which competitor it is. That could be, in some countries, mutual ones that are super aggressive. There could be some in other countries... Thank you. Understood. Thank you very much for that.

35:14 Thank you. The next question comes from Magnus Andersson from ABGSC. Please go ahead.

35:46 Yes, good morning. Just a short follow-up on the capital thing. I understand you're not going to say much more, but you said you do not expect your business plan to be impacted, and you changed your communication around buybacks in conjunction with the Q2 report. Thank you Magnus, good morning

36:32 Again, just to be clear, the main decision related to this, or the only decision we're communicating, is the pause in buybacks. And for us, that is about a sensible decision on discretionary capital distribution, so excess capital. The way we think about growth or possible M&A, those are part of sort of business as usual for us. And so this is about saying we're going to hang on to excess capital and pending clarity on the impact of RIA. So I just want to be really clear. Business as usual continues as before for Nordea.

37:21 Okay, but you don't really know whether it will be excess or not in the end, I guess.

37:26 Until you get the outcome. Yeah, but you know our philosophy well, Magnus, which is deploy capital into growth, both sort of organic, inorganic, and excess for distribution. And when we've talked about our long-term plans, I think we've been fairly clear around what our growth expectations are and therefore what excess might be. So I think it's important to think about our decisions in that context.

38:00 Okay, thank you. The second one is just on your 2030 plan and 2030 financial targets. I mean, you keep it on the fact that we have a completely different short-term rates scenario now than on the 6th of November last year when you presented the plan. So All is equal, that should have a positive impact on your NII. If you could tell us, will you utilize this to invest more than you previously expected to do, or how do you look at various components here? And related to that, I saw you updated your hedge guidance, what interest rate scenario you have used.

38:45 So thanks Magnus and that's a critical question so back at CMD we did anticipate around about 50 basis points of rate increases but further out the curve and of course what we've seen in the short term is that those 50 or so basis points have come probably sooner than expected now does that mean that the end point is higher I think it's too soon to say so right now I think it is it's positive for deposit margins and NII that we've got rate hikes a little earlier than expected We're, of course, as we say in the report today, mindful that if central banks go much further than this, there's a risk to confidence and consumption. But at today's levels, I think it's constructive for NII.

39:51 We really can't say whether this is those 50 basis points coming now and what we might expect a little bit later. But that's why we're sticking to our guns on 2030 guidance. But I think in the short term, and I would say the outlook for 2027, a little bit higher rates is certainly helpful for deposit NII. On the sensitivity and our hedge disclosures, we recast these at the end of every quarter. So essentially what we've done is apply our sort of Q3 position in terms of just where our balance sheet is and the hedges they're on and then the outlook as at that date, which moves around a little bit.

40:38 But I think the... I think the slide, sorry, I keep forgetting now which page it is. Slide 18 gives a good representation of what we expect based on coming out of Q3.

40:54 Okay. Thank you very much. The next question comes from Namita Semtani from Barclays. Please go ahead.

41:06 Morning, and thanks for taking my questions. My first one, sorry to go back to the corporate model ECB review, but I just wanted to know, is this a review specific to Nordea, or is this an exercise that ECB is doing across European banks? My second question, can you just explain to us where the lending margin pressure on net interest income is from, aside from the Danish mortgage book being repriced, geographies, what segments, like what subcategories is it coming from? Thank you.

41:40 Thanks, Namita. So we know our position, and so our comments today, our report today is in relation to the Nordea position. I have no knowledge of whether this is something broader across the industry. We're very focused on the Nordea specifics. And then your second question on lending margin pressure. Q3 is a similar story to what we've seen over the last few quarters in the mortgage market where there has been fairly intense competition in Sweden and Norway on mortgages and that continues and I would say possibly intensified a little bit in Norway in Q3.

42:31 But overall, I think we're managing it pretty well and with a strong focus on the liability side of the balance sheet as well. So I think that's as best as we can say there. In Denmark, on the retail side, we had a specific price reduction that came into effect in July and that's impacted net interest income in our pet business in Denmark. so that's really what we see on the household side on the corporate side margins are pretty tight and pretty competitive but still relatively stable and it's also possible to compete on terms and other things and that's what we see some of our some of what's happening in the market.

43:23 Nothing egregious, but it's a pretty tough market out there and I think we're doing well to deliver in that.

43:35 That's helpful. Thanks very much, Ian. The next question comes from Sophie Petersens from GS. Please go ahead.

43:48 Yeah, good morning. Here is Sophie from Goldman Sachs. Thanks a lot for taking my question. I'm really sorry to go back to this posing of the share buyback and the corporate IRB models. But I think there is quite a lot of confusion in the market around kind of your corporate IRB models. So maybe I think it would be helpful if you could just remind us all what the background to this is. And related to that, I know you didn't want to give any additional details, but how long should we expect the share buyback pause to be?

44:33 Just 2026 or should we also think that it could be extended to 2027? And also, how should we think about the dividends? Is there any risk to your 60% to 70% dividend payout? And are there any other regulatory headwinds we should be mindful of? Yeah.

44:55 Thanks, Sophie. And I do understand why you guys are focused on this. So no need to apologize. I guess I'm not sure why there should be confusion. We were pretty clear in our capital markets day that we were submitting application documents. to replace our corporate models and that we would expect to hear something towards the end of this year, early next, in terms of feedback on that. And so that's what we're reporting on today. And we had previously guided for a neutral capital impact and based on recent feedback, we now see that there will be a real increase in So those are the facts.

45:45 And then, as we have said, we are pausing share buybacks pending clarity on the REIA impact. We've also said that we won't speculate on outcomes and that no decision is expected before 2027. So it'll be sometime in 27, but we don't have any clarity from the ECB on that yet. Now, just your last point on dividends and other regulatory headwinds. We're not changing anything in relation to our capital policy today. And so focus on, I think it's important to focus on what we have said and what we have not. So pausing share buybacks.

46:36 We're not changing financial guidance or targets. We reported solid Q3 results and no changes to our capital policy.

46:46 Okay, that's very clear. It's clear to everyone else as well. And then maybe just a second question in terms of also, I mean, loan growth has been very strong and you already commented that you are like getting more Bank Abp Bank Abp

47:35 Remember, Q3 is a summer season of quite a big part of it, of the Nordics. And it starts in the... in June, and then it runs into a little bit differently, but in the start of August. So that has an impact. So Q3 is always seasonally slower. But if we start with the retail side, I would say that we don't see any signs of a slowdown. There are a little bit difference between the markets, but when we look at the total portfolio, I would say same speed, likely a little bit better. I'll come back to the risk. And the risk, of course, is how will the rate outlook be?

48:27 And I think the market is resilient enough to capture or to cope with some increases. But, of course, there is a limitation. Denmark is slowing a bit down, but had a significant pickup and a bit fast increasing house prices. That is more normalizing, I would say now. On the other hand, then Finland is starting to get a little bit more speedy than it was previously. Sweden is picking up. Norway is having okay speed. So no big change, I would say, on the corporate side. Bank Abp which deals we end up getting, when they will happen, to what price do we want to bring them on for that price.

49:29 And so that's up to be seen. But the momentum is good and no big change. Then when you think about our lending growth, 8% right now across the board, that's a bit high number. So I I would be cautious to forecast 8% forever. That will be a bit too optimistic, of course. But let's see how it plays out.

49:55 That's very helpful. Thank you so much.

49:58 Thank you.

50:10 Hi, it's Isabel Hetrick from Autonomous Research. Thanks for taking my questions this morning. I have two, please. So first, net inflows into Nordea's asset management AUM remain well below levels we saw last year. Despite your recent success of the Empower Europe fund, what color can you provide on your product pipeline to potentially help re-engage clients? and what other factors do you think are keeping clients on the sidelines and are there any levers you can pull to help address these? And then second, within private banking, in the last week we've seen yet another peer announce plans for growth in the Nordics with a particular focus on suite. What do you see as Nordea's right to win business in this area, noting your success attracting new clients to the platform over the last year?

51:02 Thank you. Hi, Isabel. It's Ian here. I'll tackle net flows and then you might talk private banking, Frank. So it was a quieter quarter, for sure. We did well in key areas, which was very strong in life and pensions and private banking flows. and then pretty much flat on the wholesale side. And I think that's the more difficult part of the business, I guess, where we've seen some choppiness over the quarters. We think our product sets are performing well. And, you know, we have...

51:48 Abp Bank Abp customers will make larger withdrawals and things like that nothing untoward in it no particular concerns but it's a tougher part of the market for us but our Nordic customer base it's around 85-86% of our assets under management and performing extremely well on particularly life and pensions and private banking Good

52:38 In regards to the private banking franchise and the competition, it is, I think, in most countries, but at least in the Nordics, where we are operating, it is crowded. Many new entrants, many boutiques. That's not really anything that surprises us. But what perhaps is obvious, I think, is that there are One thing is to establish yourself as a private banking business. Another thing is to get scale. And that's not easy. I think there are too many players now. I think the landscape will be different over time.

53:24 When we start with how we are positioned, I would say we have a very broad-based, strong private banking platform covering all four Nordic countries. We have two very mature, strong, very profitable, well-run businesses in Denmark and in Finland. They are growing despite the size, and they do that due to their capabilities. And of course, being a part of the Nordea family helps as we grow. Remember, one of our strengths is that we can grow with the customers from they are born to they are not here anymore. And that's really a strength.

54:11 It's very difficult for boutiques to just start from scratch and then get scale. We have Norway and Sweden where we have strong franchises, strong momentum, but sub-market share within private banking. And we are growing very nicely in Sweden. It is a very integrated part of our franchise there. It connects very well with both our corporate business, our small business and mid-corps, and our personal banking business. The same goes for Norway. I would say that this market is crowded, but it is about being sharp, intense.

54:58 It is about having the right offering, ensuring that you are close to your customers and and have this hunger to win. If you have that, we will keep winning. And that is our clear ambition. And there's nothing that indicates that we are not doing that. The Q3 brought a net inflow of, as I recall, 0.9 billion euro. So slightly south of 1 billion in the quarter. Super strong inflow, both from new customers and asset under management. So that's where we are right now.

55:31 And maybe if I just add to that, one of the things that I think Nordea has a very strong advantage compared to niche players is our internal market, if you like. So when we work with, for example, business banking customers and there are liquidity events, there's a very strong relationship. Those customers become private banking customers if they're not already private. And so that internal market works very well.

56:05 Great. Very clear. Thank you.

56:07 Thanks, everyone. And operator, we'll take the last question now. Thank you. The next question comes from Johan Ekblom from UBS. Please go ahead.

56:21 Thank you. Just two quick follow-ups on capital, please. I guess number one, the outcome of the retail model was worse than I think most people had expected originally and now there is negative changes to expectations here. Are there any other outstanding model updates of meaningful magnitude that we should be aware of that are in the pipeline or is this kind of the last major one? and then and then secondly you keeping growing your corporate business very well now there's some uncertainty around the capital consumption of that so can you give us some color how you think about the profitability of the corporate growth that you've you've delivered over the last year and what you intend to do in the near future

57:14 Thanks, Yuan. So today, as I repeat, but it is important, is we're flagging that we were previously guided for a neutral impact. We expect to re-increase. But we can't say any more than that because discussions are ongoing. if we had other things to report, we would have done so. So this is our clear focus. And then in terms of corporate growth, as you know us while you're on, we're very disciplined around our profitability in general. But particularly in corporate, we have a hard-won position in terms of having Abp Abp Abp In terms of going forward, I'll go back to again, I've said several times today, focus on what we have said and that's what's important. We're not changing our guidance.

58:50 Thank you.

58:52 All right. Thank you, everyone, for participating in the call. Ian, before we end, anything to round up on, please?

59:03 Yeah, thanks. And thank you for all your questions today. We very much understand all of the questions on the model situation. We're trying to be as helpful as possible. But it's clear that you'd like more information and we don't have that to share at the moment. So that's how it is. And we've... Abp Abp Abp It probably means that we're more at the flat to the slightly up end of that.

59:50 But I thought Q3 was still encouraging in that we've seen for the first time that combination of volumes and deposit margins exceed the lending margin pressure. But also remember that FX turned into a headwind in Q3 versus the first half. Costs, I think we're in great shape. We didn't talk about costs much on the call. And, you know, we think that we're around, you know, we'd expect to land around five and a half billion for the year because we have always a bit of a seasonal pickup in Q4. Point to our cost income ratio guidance. Frank reiterated we expect between 44 and 45 percent. and then my last point was just on net fair value net fair value was down in Q3 following the sharp increase in interest rate expectations at the ECB meeting and that was a considerable shock on interest rates I think we saw the largest movement in a single day movement for 20 years following that ECB meeting and I think given What we saw in Q1 with the Iran conflict and the rates up in September, we should expect a lower than normal result in net fair value for the full year.

1:01:17 So I just wanted to make sure that we captured a good roundup of the business because I appreciate there was quite a lot of focus on capital and the ECB today. So thank you.

1:01:29 Thank you so much and as always feel free to always reach out if we can help with anything. Thank you.