Earnings Transcript for SK.PA - Q4 Fiscal Year 2024

Johan Torgeby: Good morning and welcome to this Closing of the Books for 2024 Earnings Call. As always, we will run through the PowerPoint presentation that we have posted on our website. Going to highlights, we have seen increased customer activity within corporate and investment banking still called large corporate and financial institutions division and some healthy customer activity with loan growth in the Baltics. Both costs and capital came in as planned for our full year targets. The cost target for 2025 is set at SEK33 billion, which will enable us a fair balance between incorporation of AirPlus, reinvesting in the business, acknowledging some higher inflation rates going forward, compensated by continuation of extract efficiencies and productivity gains within the Group. The board has proposed to the AGM an ordinary dividend of SEK8.50 per share combined with a special dividend of an additional SEK3 per share. And we’ve also announced the intention and the share buyback program for the full year of 2025 of SEK10 billion. Going to Page 3, some of the recent developments when it comes to the all important customer satisfaction scores that we follow very closely, it is very encouraging to see that we maintained the top position for the Nordic corporate bank. We also came out and this is a little bit novelty for us because we haven’t had this position for some time as the top ranked domestic equity provider, equity service provider in the Nordics whilst for financial institutions we came out at number two with a top position in Sweden, Finland, Norway, but a third position in Denmark. The yearly Prospera survey of private banking in Sweden we came out six with which is something we’re not satisfied with, double clicking on the six which comprises three different categories

Christoffer Malmer: Thank you very much, Johan, and good morning everyone. So I’ll start on Slide number 6 where we’ll have the financial summary for the full year 2024. Operating income is up somewhat compared to the previous year at SEK81.9 billion, operating expenses at SEK30.9-ish billion is at or as you can see a sliver below our communicated cost target of SEK31 billion and that’s an increase excluding AirPlus of 6% on an underlying basis, and operating profit of SEK46 billion down 2% versus last year excluding the impact of AirPlus for the year. Net profit at SEK35.9 billion sequentially from last year down 3%. And as you can see from the EPS development down 1% underlying, you can see the impact of our continuous and ongoing share buyback program that we also announced a new one last night. Return on equity for the full year at 16.2% and asset quality remains very benign with net ECLs at 3 basis points. Going to Page number 7 and a closer look at the financial summary for the fourth quarter. Please note that we now continue to provide comparison columns both within – including and excluding AirPlus. This will be the last quarter that we’ll be doing that. We’re now working very hard on the integration and as we are effectively merging AirPlus into SEB Card, you will start to see merger effects and synergies in both of those areas and therefore we will continue going forward to report this as part of C&PC. Now, having said that, we will, of course, provide an update on the progress and an evaluation of the business case as we progress. And a brief reminder, Q3 had two months of AirPlus and Q4 has the full period of AirPlus included. Looking at the income line at just under SEK20 billion, it’s down underlying 6% compared with the previous quarter. And if you look at the mix of that, we’ll see the net interest income is down 2% and we’ll come back to that in a moment. Fees and commissions at SEK6.5 billion on an underlying basis, that’s an increase of 7% compared to the same period of last year and because the seasonality of course Q4 of last year is the most relevant comparison. And here we can see underneath that 7% growth that there are some signs, and Johan alluded to them, of activity levels in the Corporate and Investment Bank, in LC&FI, fees around advisory, securities and secondary trading are up in the region of 25% to 30% compared to the same period of last year. So some encouraging signs of activity levels picking up. Net financial income is down from the Q3 high print. As you will recall Q3 was a significant increase compared to the average run rate. And here we have the mark to market effect, not least of our strategic holdings, which in this quarter is an adverse impact, so a decline of a negative mark to market about SEK390 million. Against that we have positive XVA effects of about 150. That takes us to the income line. Looking at the expenses for the quarter of SEK8.7 billion and then noting that within that SERK8.7 billion there is about SEK500 million of implementation charges related to AirPlus as previously communicated. In note number 16 in the release you will also see that about SEK400 million of that is actually booked in AirPlus and the rest the balance is booked within SEB Card. As you will recall we also have SEK200 million of transaction cost related to AirPlus in Q3. So the total AirPlus related implementation and transaction cost for 2024 then adds up to SEK700 million. Going below the profit before ECL and imposed levies at SEK11.3 billion, we come to the ECL number and there we’re reporting SEK377 million similar to – in line with the previous quarter. And the underlying pattern is quite similar as well. There’s a handful of larger exposures that are requiring provisioning uncorrelated both geographies and industries and we’re also releasing some of our portfolio overlay to the tune of about SEK400 million. So a similar release as we saw in the third quarter. On imposed levies, there is a decline compared to Q3 and here we have primarily related to the Solidarity levy in Lithuania. Looking forward into our levies going to 2020 – for this year 2025, we will continue to see the resolution fund fee and the risk tax roughly at the same level as we are this year. The mortgage levy in Latvia will discontinue and will be replaced by a Solidarity levy instead, largely the same effect somewhat bigger. And the Solidarity levy in Lithuania we’re expecting to decline somewhat and that’s a mathematical effect as it is based on an average net interest income over historical run rate. In total, we’re estimating this to be somewhere in the region of SEK3.3 billion for 2020. That takes us to an operating profit of SEK10.1 billion. You will also note that the tax rate is somewhat higher at 25.6% and there’s a couple of reasons for that. First of all, there is some dividend payments between our subsidiary in Estonia up into the mother bank and that has a tax effect in the quarter. We also have a slightly higher amount of subordinated debt outstanding, you will recall that we did an SEK81 million [ph] in October, so the tax on those securities is non tax deductible. So there is a tax impact of that. And the third effect is also a prudent and cautious treatment of deferred tax assets related to AirPlus. Now having a look at the and just to mention the RoE for the quarter of 13.2% and we’re also providing the RoE adjustment for all the AirPlus effects at 14.6%. Now double clicking on the net interest income and the development in the quarter from SEK11.1 million to SEK10.8 million. Looking at the divisional effect, you will see that the large corporate and financial institutions excluding the effect from IFTP is largely flat. You will recall that in Q3 we did have some effects from IFTP internal funds transfer pricing and we flagged that they would continue into the third – into the final quarter of the year and that’s what you’re seeing now. We talked in Q3 also about a negative deposit mix effect in LC&FI that has abated. There is none of that we’re seeing in the quarter. However, the yield curve effect that we alluded to in Q3 which had a negative impact at the time with an inverted yield curve, that is now flattening out and it’s actually a small, positive contribution. And the steepness of the yield curve is an important development. And as you will recall, the difference between the coupons that we’re booking on our fixed income inventory and FICC relative to the mark-to-market effects that goes through the net financial income line. Volumes, underlying volumes and margins are largely flat. So adjusted for IFTP a sideways movement. Looking at the C&PC division, you will see that the IFTP effect is about SEK200 million as well. Both of those effects, by the way, are offset in funding and others. So in treasury, there is a full mirror image of those IFTP effects. Outside of that, there is a decline of SEK200 million, which reflects the lower rates in the quarter, impacting deposit margins, somewhat offset by improving mortgage margins. You will also have seen in the quarter that we have had repricing of our wholesale funding at market rates, which have been declining linked to STIBOR over the course of the quarter and some products which are lending products that are priced off the policy rates have stayed somewhat higher in the quarter, resulting in a positive contribution to net interest income from those repricing effects. And we’re estimating that somewhere in the region between SEK100 million to SEK200 million, and they will eventually fade away as rates stabilize and normalize. In the Baltic Division, there is a sequential decline of SEK100 million, and that is reflecting, as Johan also alluded to, a positive contribution from volume growth as we have seen some pick up there, offset somewhat by a continuous, competitive environment in margins on the lending side and the lower rates, of course, impacting deposit margins, resulting in the SEK100 million sequential decline. In the treasury funding and other, you will see the mirror image of the IFTP effect in combination with a positive trading treasury net interest income. Turning to Page Number 9, you will see our normal distribution of net fees and commission trends. And on an underlying basis, as I mentioned, an increase of 7% compared to the fourth quarter of last year. Now the positive effect is split over two categories in this disclosure. So, if you see the securities and commission income that is up 17% year-on-year, that does reflect those trends that we’ve been commenting and those activity levels in combination with continuous good growth in our Asset and Wealth Management business. Net inflows in the fourth quarter amounted to SEK12 billion, and net inflows for the full year stood at SEK60 billion. In the advisory fee and lending fee, you’ll actually see a drop year-on-year, and that is primarily related to the fact that lending fees in the fourth quarter of last year were very elevated. So, the advisory fees are the strongly performing year-on-year contribution. Payment and card fees largely reflecting the consolidation of AirPlus. Turning to Page Number 10, you will see the breakdown of our net financial income development. And as I mentioned, the biggest swing factor between the quarters is related to our strategic holdings and that impact is SEK390 million; of that, Euroclear is the largest contributor around SEK350 million of that. You will also recall that the yield curve steepness that we talked about previously would have had a positive effect here in the third quarter. And consequently, when that is reversing, that also presents somewhat of a headwind. Nonetheless, a solid underlying divisional NFI of SEK2.4 billion, largely in line with the longer-term trend of that line item. Turning to Slide Number 11, and the development of common equity Tier 1 buffer quarter-on-quarter, we ended the third quarter at a buffer of 470 basis points, and we communicated that our ambition before the end of 2024 is to come in within the buffer – management buffer range of 100 to 300 basis points. The development during the quarter is, of course, our retained earnings after the proposed dividend. And as Johan mentioned, the proposal of the ordinary dividend is SEK8.50 per share. We then deduct the impact from the special dividend that was also proposed of SEK3 per share. And then the share buyback, where we have applied for a full year 2025 buyback program of SEK10 billion. And since that has been approved, as usual, with approved buyback programs, we deduct them in full from the common equity Tier 1 ratio. You will see some impact from REA in the quarter, but perhaps worth calling out is that FX impact with increased REA by about SEK13 billion in the quarter, primarily as a result of the weaker Swedish krona. This had a negative impact on the common equity Tier 1 ratio of 26 basis points in the quarter alone. Another 26 basis points attributable to market risk REA, operational risk REA, and also some outflow III add-ons related to IRB models in retail. That takes the management buffer at the end of 2024 to 290 basis points, in line with communicated targets. Turning to Page Number 12, the cost target that we’re announcing for 2025, and as Johan mentioned, of SEK33 billion, and here is a little bit more color behind that. We will start with the reported 2024 full year cost level of SEK30.9 billion, so just under the SEK31 billion communicated in Q3. Now bearing in mind, and as I mentioned, this includes the SEK700 million implementation and transaction costs related to AirPlus. As we’re expecting roughly the same size of implementation charges in 2025, there is no delta from the AirPlus implementation cost charges. So, the delta we’ll go through here is primarily related to inflation, which we expect to have an impact of about SEK800 million to SEK900 million. And then, of course, the full year consolidation. So from five-month consolidation in 2024, we will have 12 months of AirPlus in 2025. And of course, the impact from the ongoing activities, consolidating these businesses and reaping these synergies. And just a quick word on that. The integration is running at full speed. And as I mentioned, it’s effectively merging the businesses of AirPlus and SEB Kort and the synergies will then be realized in both parts of that equation. We’ve had good progress in negotiations with the unions, and we have reached an agreement with the workers’ council, which allows us to proceed with our plans in that area. We can also see that our new offering is attractive. So, combining the footprint of AirPlus with that of SEB Kort has allowed us to sign at this point, two, quite sizable, home market customers that otherwise we would not have been able to serve with, let’s say, to the same extent with this new offering. And we have a number of exciting prospect discussions with that new offering. We’re also proceeding with the exit of 29 markets that we will be leaving as part of the restructuring program. Now having said that, we are, of course, facing a challenging macroeconomic backdrop in Germany, in particular, and that is the biggest and most important market for AirPlus. So the range that we’re providing on the cost outlook for AirPlus in 2025 is really giving us the ability to take action if needed to accelerate the implementation activities in the event of any adverse developments on the revenue side and therefore, allowing us to meet our communicated target of breaking even of that business effectively income meeting costs, so a neutral EPS effect, excluding implementation charges in 2025. It is a challenging target, but we’re committed, and we’re giving ourselves this flexibility to deliver on that target. So with that, we are concluding the fourth quarter reporting, and we’re moving into a business plan update, as Johan mentioned. And before I hand over to Johan to take us through the outlook for 2025 and our business plan activities, going to Page number 14, just putting the business plan into context of our longer-term strategy. As you will recall from 2021, we announced SEB’s 2030 strategy based on a number of pillars, and this very much is the foundation of what goes into the business plan. The business planning period is in three-year cycles, and we just concluded the one between 2022 and 2024. And now Johan will go through our forward-looking ambitions for 2025 through 2027. In addition to that, as you know, we’re also calibrating this annually and providing annual cost target guidance just like the one we’re providing today. A quick look in the rearview mirror on Page number 15, just a glance of the activities and the achievements from the business plan 2022 through to 2024 across the Strategy 2030 four pillars of Acceleration, Change, Partnerships and Efficiency. And starting with Acceleration, I think it’s worth calling out that we continue to expand our corporate banking business carefully, but importantly, in new markets in Europe. And having added then the Netherlands, Austria and Switzerland categorized as home markets for large corporates and financial institutions, and Johan will talk more about our plans going forward in that area. But that, of course, has been an important accomplishment in terms of accelerating our growth and our ability to address customers across Europe. I would also call out the acquisition, of course, of AirPlus, which will create a European leader in corporate accounts, cards and payment activities which, of course, is also an important part of the acceleration of our income and profitability ambitions going forward. Under Change, I think it’s worth mentioning that we have created the new division, Wealth and Asset Management, combining Private Wealth Management and Family Office together with SEB Asset Management and SEB Life to reemphasize our ambitions to grow within this area and underlying the opportunity and the potential that lies therein. We’ve also continued to work on our digital presence and upgraded activities, both in our Swedish mobile app and digital platform as well as in the Baltics, where we actually moved to a new digital infrastructure that allowed us to release a number of exciting features and products over the last couple of months. We’re also live in production with our Banking-as-a-Service platform on a cloud-native platform in SEB Embedded. Across Partnerships, we continue to work with partnerships to improve our product offering. And there, we work with partners to provide products, but also to enhance our distribution capabilities, for example, with PE Accounting for digital accounting services and also helping our small businesses to open new companies together with Fortnox. So combination with partners, allowing us to both expand our product footprint and leverage technology partners and distribution channels. Finally, on Efficiency, we continue to expand our digital presence and our capabilities around our API infrastructure. This is a critical enabler to be able to tap into new technology capabilities that we would like to add going forward, but also allowing us to more cost effectively operate our broader technology stack and become more nimble and able also to leverage SaaS partners and SaaS providers. We continue to see an increase in operational productivity by 18% over the last three years, and that is measured as transactions per employee within business services and operations. So a good continuation and focus going forward is to continue to automate and make more efficient anything that can be automated. So with that glance in the rearview mirror, I’ll hand over to Johan to look forward on the horizon.

Johan Torgeby: Thank you, Christoffer. And then I’ll turn to Page 16, the strategic priorities for the three-year plan. And just to start off, the 2030 strategy is unchanged and holds firm. And there is no revolution in what we are here to say today about the next three years, but this is the way we work with three-year plans, as Christoffer just went through. Every plan in order to anchor it within an organization like SEB needs something of a campfire to gather around. So this is really our campfire slide, where we center the high potential areas in two categories

Operator: Thank you. [Operator Instructions] And your first question comes from the line of Magnus Andersson from ABG Sundal Collier. Please go ahead.

Magnus Andersson: Yes, thank you very much and good morning. Two questions. First of NII and the second one on costs. Thanks for the color there on the timing effects of SEK100 million to SEK200 million here in Q4. Secondly, I was just wondering, given your scenario in Nordic outlook released yesterday where the policy rate is expected at 2% in June 2025 and 150 the ECB deposit rate in December 2025, 175 June 2025. Roughly speaking, in what quarter, when do you think your NII will trough in this scenario? That’s on NII. And the second one on costs. Just on the investment plan, the SEK600 million, SEK700 million, if you could tell us what is progressive investments where they are going and what portion is more house in order that you can’t really impact so that we can get a feeling for the potential flexibility there? Thanks.

Christoffer Malmer: Thank you, Magnus, and good morning. So I’ll try and answer your two questions. On the net interest income side of things, I think we’re – as you were talking a little bit about, of course, is the impact that is happening when market rates are moving and policy rates are moving not exactly in tandem. So under the assumption that you eventually get a flattening out and a stabilization of policy rates and, as you said, in Nordic outlook, we have our assumption. I think one rule of thumb, one indication that we’re thinking is that repricing of loans subsequent to that flattening out and similarly on funding would be three to six months, but we’re probably more on the six-month level. So broadly speaking, six months after the stabilization of rates, we would have seen most of those effects play out. And after that, effectively being a function of volume and margin developments for net interest income from there on. On the investments, and thank you for reminding me, actually, Magnus, I should have, of course, commented on that when I went through the slides. So thanks for calling that out. On those investments, the plan is there to continue to invest in some of our core platforms in the bank. It’s primarily on the technology side of things where we have ongoing projects that are related to upgrading of our technology stack that Johan alluded to a little bit in his forward-looking comments as well. And those are the ones that will enable us to leverage and tap into the new technology opportunities that are related to AI and other components, but that means that, that ongoing and underlying upgrade of our infrastructure needs to continue to fully be able to leverage that. And I’ll take the opportunity to comment on the other point on that cost slide that I didn’t mention, which also on the efficiencies. And Johan mentioned a little bit in his comments as well that we’re into a phase of consolidation. We have had investment pace. This is a somewhat lower investment pace than you have seen over the last couple of years and critically an important part – important time to take out and manage efficiencies and take out the benefits of having made those investments. So that is where we’re seeing the benefits from the efficiencies coming through. That takes us to the SEK33 billion total target.

Magnus Andersson: And just on the investment plan, how much is of the SEK600 million, SEK700 million is house in order, like risk compliance, financial crime prevention?

Christoffer Malmer: I would say, at this point in time, that is a relatively smaller part of the overall investment. We continue to invest in that, and that continues to require attention. And some of the activities are actually, particularly on the technology side, things that we are doing to improve our infrastructure has the dual benefits of making us better at, for example, transaction monitoring and automation and digitization, also allows us to build better customer experiences. So as far as technology upgrades are concerned, there are investments that are playing into both house in order and our ability to build and develop new products.

Magnus Andersson: Okay. Thank you. Just a short follow-up then. On AirPlus, you mentioned that we should see the similar amount of integration cost or implementation costs of SEK700 million in 2025. Do you still expect anything there in 2026? And also, will it be primarily in the form of redundancy charges as we saw a large chunk here in Q4?

Christoffer Malmer: That’s right, Magnus. So we have – we’re expecting some charges to continue into 2026. And as you will recall from our initial target communication, we said that in 2025, we want to be EPS neutral, excluding implementation charges. And in 2026, we want to be EPS neutral, including implementation charges. So if they continue into 2026, they should be absorbed by the improved profitability in the underlying business such that they will not be impacting the overall profitability and the EPS neutrality should come through. But there will be somewhat less redundancy charges. We try to front-load a lot of the redundancy charges. And in 2026, you’re probably looking more at technology costs to put the businesses together.

Johan Torgeby: And if I may add, Magnus, now when you alluded to our Nordic outlook published the other day, I recommend everyone to read it if you haven’t. There is another point in that, which is that the GDP growth for the countries that we are exposed to is for the first time, very optimistic in terms of SEB. So you’re looking at Europe, it looks pretty dysfunctional compared to the U.S., but not Estonia, Latvia, Lithuania, Denmark and Sweden, which are all five expected to be outliers in terms of European growth, even better than the U.S. And it’s a quite different position when we look medium term forward on economic activity, not only on when will NII trough, but what else will happen. And I think that’s, of course, a medium-term observation that I’d just like to point to that given some years where we were the lowest growth country in Europe, Sweden, that, of course, with interest rates being predominantly short term, there is an expectation from our economists now also to see an economic activity and consumption investments, et cetera, come up more here, relatively speaking, than in many other places.

Magnus Andersson: Okay. Thank you very much.

Johan Torgeby: Thank you.

Operator: Thank you. We will now go to the next question. And your next question comes from the line of Namita Samtani from Barclays. Please go ahead.

Namita Samtani: Good morning and thanks for taking my questions. I have two, please. Firstly, you have this long-term aspiration of 15% ROE, but consensus is neither there for 2025 or 2026. Do you think you can achieve the 15% ROE in 2025 or 2026? And what do you think we’re missing to get you to the 15% ROE? And if you think you can get to the 15% ROE, why is this called an aspiration rather than a set target? And secondly, the DPS is a bit of a miss today versus consensus. So I just wanted to understand why you haven’t used your pension surplus you spoke about in the second quarter of 2024 to top it up? And what’s the rationale for a semi-annual dividend now? Thanks very much.

Johan Torgeby: Yes. Thank you. The problem here lies within your question actually that it’s a long-term aspiration, which is really an assessment that we do of the banking industry, the Nordic banking industry, the closest peers and ourselves, triangulating that with what is requirement to be a competitive bank in the long run with everything we know about what we have. It’s the capital, it’s the liquidity, it’s the cost, it’s the income potential. That we have not changed for a long time. We think it is around 15%. We didn’t meet that target for many, many years where we had zero to negative interest rates. It didn’t mean that we changed the kind of indication for shareholders of what you can achieve with an institution like this. And then, of course, the backside of that is that we significantly outperformed that long-term target when rates went up. So for us, it’s not really next year how we’re going to get there. We will try to maximize return on equity limited by being a safe bank, a well-capitalized bank and making sure that we are robust and just have on a shorter period reference point that we are competitive compared with peers. Then exactly where we end up or not, you need to have an assumption about interest rates, about M&A volumes, about mortgage margins, et cetera. And that’s not something I envy you guys, you need to predict. We don’t. We just try to perform in any market regardless of what it brings us as best as we can. Malmer, do you want to say a word on dividend?

Christoffer Malmer: Yes, so just to comment maybe on the REA development in the fourth quarter, maybe worth mentioning that the FX effect, and we looked as well a little bit at where expectations were for the quarter and you can see that, that was probably the big deviation. So the weaker krona, not least against the dollar, had an impact on REA of SEK13 billion, and I think that was the deviation. That’s 26 basis points of common equity Tier 1 ratio and for every 5 basis points or so translates into about 25 of dividend on a like-for-like basis. So that explains probably some of that deviation. In terms of the pension fund contribution, we have continued this year to take a similar contribution as we have done in previous years. And some of this, as the decision is made in Q4, some of this will also be seen in Q1 common equity Tier 1 ratio. So there’s no change in the contribution from the pension fund in the quarter.

Namita Samtani: Okay. Thanks very much. That’s helpful.

Johan Torgeby: Thank you.

Operator: Thank you. We will now take the next question. And the question comes from the line of Tarik El Mejjad from Bank of America. Please go ahead.

Tarik El Mejjad: Hi. Good morning, everyone. Thanks for taking my questions. Two from my side. First of all, I will follow up on the distribution and dividend. I was also surprised that you didn’t even try to meet consensus expectations, especially that, I mean, you’ve guided you’ll be within the range. So you chose to be at the higher end. But I mean, given the fact that, I mean, CRE clearly not a concern, Basel IV is behind us almost. I mean, the NII is eroding, but you kind of see the light at the end of the tunnel. And you seem comfortable with the outlook and growth. So why this not small extra distribution to – especially on the buyback, you mentioned, I think, previously that up to SEK15 billion buyback in a year would still be not disrupting your share price actions. So this is the first one. And second one on growth. Yes, I read your outlook yesterday, but we’ve been there in the past where there have been some economists mechanical optimism as rates go down and the economy grow and improves. But what’s interesting to me here is to hear you more what you see in the ground? And when do you see the growth actually picking up? Last year, it was supposed to be second half last year. I think you postponed it to second half this year. What do you see now as an inflection point or acceleration in growth? Thank you very much.

Christoffer Malmer: Thank you very much. I can start with the first question on the dividend distribution. The communicated target was, of course, to get inside of the 100 to 300 basis point buffer. And I think we can say that we are taking active actions to get us into within that range. When we are within that range, we don’t take more additional actions to manage the capital level proactively and moving inside of that range. So we have an ongoing buyback program of SEK10 billion that we’ve had for a few years, and we like the continuity of that, and that is part of our capital repatriation model. But since we have been above the 300 basis points, we wanted to manage actively down to be within the range. Now that we are within the range, of course, the most desirable development would have been that we see a pickup coming to your second question of growth, so that we can redeploy capital into our balance sheet. But since we’re not there right now, we have taken the action to go down to be within the range. But then going forward, we would like to provide visibility and continuity, stability in our dividend and stability in our ongoing buyback programs. And with a special dividend of SEK3, we have then gotten down to be within that range. So that has been the reasoning around and, going forward, that’s how we should think about the movement inside of that range of 100 to 300 basis points.

Johan Torgeby: Yes. I just want to add one thing in the narrative of your question, and that is the dividend is not us, it’s the shareholders of the bank, who appoints the Board. So it’s not – I don’t think – just to be clear, it’s not accurate to think about the way we work as why did we not pay as consensus on average did. It’s actually why did consensus miss what we paid. So we don’t get this wrong that the Board and the shareholders of the bank looks at that. So it is a very prudent institution, SEB. So there’s always an air of cautiousness. There is a reason for not paying out more in the deliberations in the boardrooms around that everything is very uncertain as well. So even though I completely agree, macroeconomists, they are great, but it’s not something we can bank on. It’s just an observation about the public, call it, collective economist group that seems to be a bit more optimistic. And all in all, I think it needs to be just pointed out that you share – add the three things, the share buyback of SEK10 billion, the SEK3 and the SEK8.50, we are above 10% in dividend yield equivalent or total capital repatriation. And the Board, after yesterday’s deliberation thought that was a very nice and they call it balanced way. Then, of course, it’s never fun to miss consensus. I acknowledge that more than anyone. But it was not – that was not the big theme of why we didn’t do more. And then you have the Basel effect coming, and then we’ll see how the profit develops over the year.

Christoffer Malmer: You had a second question on growth. Could you please repeat that one?

Tarik El Mejjad: Yes. In a substance was our economist is drawing a kind of a positive outlook. But I wanted to hear you more on what you see in the ground, what’s the growth or the loan volumes outlook you have – you expect? And I was just referring to the optimism you had last year about picking up in the second half of last year that had been delayed to the second half of this year. I want to know if there’s any update on that front?

Johan Torgeby: Sure. I would say that it still looks very muted. So in the actual numbers we have just published today and what’s happening on the loan side, it looks to be very much wait and see. So both on the mortgage side, and you can look at the expectations for house prices in the future, it’s come up significantly from being very negative, but this has not yet been very positive and it has not transformed in a meaningful way in increased volumes. The same on the corporate side, which is also particularly in the Northern European part moving sidelines and the growth outlook is, of course, we are very dependent on Germany and these things, and there is a lot of worry out there. I don’t dare to predict because I’m so bad at it. So if I said, second half of 2024, I won’t say it again. It will come, but I don’t know when. There are a few very strong positive signs not to be mixed up with real data. The first one is that the investment bank, which is an early mover where you actually can track and trace the optimism and the feelings in the boardrooms around our clients seems to be picking up. There has been already now a meaningful uptick from a low base in fees and commission. And if you just look at the fees and commission we generated this quarter, it is very, very strong. So both on advisory, we’re talking more than 30% growth in Q4 compared to Q4 last year. Also, net fees from commissions from securities is up significantly. And all these areas are very, very positive early signs. What you do not see is an increase in loan fees, which is 100% correlated, obviously, to loan demand. The leading indicators also point of which one is the economist’s view on investments and consumption, which are the two main drivers why borrowings needs to take place. So companies expand, they invest, they build a new factory or they need more working capital. The first thing they need to do is to talk to their banks and make sure that they can finance it. We also have a very strong signal from the Baltics where it’s actually already materialized. So this is not true what I just said in the Baltics, where we have seen 5%, 6% growth. But it’s in that little no man’s land right now, where rates are continuing to come down. People would like to see them bottoming out because you then get certainty that, okay, this is the new environment. This is where we are. I don’t want to do funding right now if I think rates are going to continue to come down, particularly if I do floating rate. And then you will find a new steady state that we will come to, I hope, next year.

Tarik El Mejjad: Thank you very much for the detailed answer. Thank you.

Operator: Thank you. Your next question comes from the line of Sofie Peterzens from JPMorgan. Please go ahead.

Sofie Peterzens: Yes, hi, this is Sofie from JPMorgan. Thanks a lot for taking my questions. So just going back to net interest income. Considering that you said earlier that it takes around six months for kind of NII to trough once rates have stabilized. Does this mean that the 2026 net interest income should be lower than the 2025 net interest income? And also related to this on rate sensitivity, one of your peers gives very detailed rate sensitivity. But at the end of the day, they kind of look at the equity base, they look at the transactional deposits. If I would kind of take your equity base of SEK230 billion, SEK1.2 trillion of deposits, but let’s say, 25% of those are transaction deposits, I would get the kind of SEK500 billion base. Is it fair to assume that kind of 100 basis points lower rates would translate into SEK5 billion lower NII? Or is that the wrong approach? And then the second question would be on your interim dividend. Did I understand it correctly that the 2025 dividend will be paid in two tranches basically in 2026? So – or is it that 2026 earnings that will have an interim dividend in 2026? But if you could just clarify how do you think about the interim dividend that will be paid in 2026? Is it against 2025 earnings? Or is it against 2026 earnings? And then just a final clarification. The Basel IV impact, has it changed? Or is it still kind of limited around 50 basis points? Thank you.

Johan Torgeby: Thank you, Sofie. Johan here. I start with apologies if I was unclear on the dividend. It is the dividend attributable to the result of 2025 payable in 2026, which is semiannual. So the dividend for 20 – yes, that’s the short and sweet of it. And that’s just, that’s a proposal that we aim to put to the Board at the time – to the AGM at the time. So just so everyone – I would put in the model a semiannual because I think it’s more likely than not, that will be approved.

Christoffer Malmer: And on your net interest income, I think you’re on to the – I would do the math very similarly to you. So of course, you take your assumption of interest rates when they trough and stabilize and then as we said, around six months for repricing effects to play through and working around, as you said, the free funds of equity and transaction deposits. Then, of course, it’s the big question around volume and margin developments in general. So with all those assumptions, I think then you’ll come up with the net interest income that you think you should be calculating for 2026 and 2025. On your Basel question, yes, there’s no change in our outlook there. So what we said in Q3, 50 basis points ratio on the high end is the expectation.

Sofie Peterzens: And just finally, your 2026 net interest income should then be lower than the 2025 net interest income?

Johan Torgeby: It depends on your assumptions, so we don’t know. It depends on the margins and the volumes and where the rates trough. So...

Christoffer Malmer: But I think you have all the dynamics to put in your assumptions.

Sofie Peterzens: All right. Clear. Thank you.

Christoffer Malmer: Thank you.

Johan Torgeby: Thank you.

Operator: Thank you. Your next question comes from the line of Gulnara Saitkulova from Morgan Stanley. Please go ahead.

Gulnara Saitkulova: Hi good morning. Thanks for taking my question. So the first question is on Swedish mortgages. So we saw that the mortgage margins on the portfolio level have expanded in Q4. Do you think that the competitive pressure in Sweden could subside from here? And you mentioned that retail banking market share in Sweden at 30%, and you want to grow it modestly. What would be your desired market share in Sweden? And what are the key levers for growth for you there? And the second question, broader on the regulatory front. Maybe can you share what are the key debates with the regulators that you are having at the moment? And what are the key areas of concern? Over the past couple of years, CRE was high on the agenda, but now it looks like the risks have subsided and the exposures have been resilient. What do you think are the key points of their attention right now? Thank you.

Johan Torgeby: Thank you. I can start and Christoffer can fill in. On the Swedish mortgages, I would start with saying a comment on how I view the dynamic in the pricing, and that is that there are two vessels communicating with each other, and that’s deposits and mortgages. When interest rates go down, it is in favor of lending and unfavorable for deposit taking. And when rates go down, it’s favorable for lending and unfavorable for deposit taking. The thing that has happened now is it’s a transition. So demand is not there. Therefore, the margins have not expanded anything meaningfully during the last 18 months on mortgages. So you can see that the cuts that the Central Bank in Sweden has done, we more or less followed it and not – because you had enough on the deposit side. That dynamic is now very interestingly shifting. Therefore, in this quarter, you saw a modest margin expansion on the mortgages, which is the natural cost – the natural direction of travel that you will see margin coming down if rates go down on deposit taking, you will see margins going up. But they will be dictated by competitive pressures, timing effects, who does what and when. And right now, I think there’s still very high competition and very low demand. Therefore, that explains with the benefit of hindsight, probably why margins have not expanded to compensate for the falling NII generally. I think it’s very useful to look at the negative to zero interest rate time, and see how things look then. Then it was absolutely the reverse. No one here, I do believe, thinks, we will have negative interest rates or zero again for – in the near term. And therefore, we should be somewhere in between where the rates peaked and where the rates were at an all-time low. And that is a process right now. Normally, you should see volume starting picking up when the cost of financing goes down, and that is the whole point. And I’m pretty sure that the Central Bank will continue until this happens because that’s how you get the transmission mechanism for the economy to be more supported by rates. Sorry for the long-winded answer, maybe I didn’t answer the question at all.

Christoffer Malmer: I think there’s nothing to add. I mean, mortgage margins remain under pressure, particularly as volumes are low. So there’s no development there right now.

Johan Torgeby: And on risks, you might recall that we were unusually comfortable, very comfortable, I would argue, with the CRE risks that we had, but it was very, very topical for almost 18 months. That has now, of course, completely gone away and some of the best-performing stocks is now within this space. And therefore, I would conclude this. Cyber risks are very high on the agenda going forward. We’re very happy with the credit quality of the bank and the liquidity position of the bank. There are certain industries in Europe that we have special attention to, not at least there’s a lot of discussion about Germany and the larger industries in Germany and the long-term outlook is being discussed. We, of course, are very conservative and always look on potential risks. And I would say we have special attention on some of those. We also have a little bit of legacy from any business model that relies on funding or financing to a large extent, like the real estate sector or like the private equity industry, but everything is not a Goldilocks yet. The weaker business models who did experience these high interest rates, they are not yet. It takes many years sometimes to do restructurings and making sure that you have the appropriate capital structure to cover – to survive any cycle that comes. And if there’s anything that’s good with increased interest rates is that this gets challenged. You see what models are strong and not and who can stomach higher financial costs and then you need a good underlying business to support it. And then there is, of course, a huge amount of discussion right now on the regulatory framework particularly the U.S. and the European, it’s all up in the air. So I wouldn’t call it as – it’s a risk in that sense that right now, I think there’s going to be a lot of political decisions over the coming two years that might change things. It doesn’t feel like there’s been a common agenda communicated clearly to the financial industry on what is what.

Gulnara Saitkulova: Thank you very much.

Johan Torgeby: Thank you.

Operator: Thank you. We will now go to the next question and the question comes from the line of Nicolas McBeath from DNB. Please go ahead.

Nicolas McBeath: Thank you and good morning. So a question on your capital target now. So you’ve acted on your commitment to be within the 300 basis points management buffer for 2024, which was set three years ago. So just wondering, looking ahead, are you still committed to be within the range? Should we always model that you pay out any capital buildup exceeding the 300 basis points management buffer?

Johan Torgeby: I would say, hey Nicolas, nice to hear from you. It’s no change from the Board financial policies that we should aim for being in the range 100 to 300. So no change.

Nicolas McBeath: But what does that mean in practice? Because you’ve had this target and you’ve been above the targets for quite a few years now. So how should we interpret that? Is that still something that we should model according to? Or yes, what’s the…

Johan Torgeby: Yes, I mean – okay. Then I’ll say the reason we were – I mean we peaked at whatever, 800, 900 basis point buffer. It’s not – it was not inside our control. It really started with the dividend ban due to COVID and inflation and uncertainty of credit risks, which was, of course, something we were very loudly against in 2021. It did create for strong banks like us, a very precarious situation because it doesn’t matter what the Board or the shareholders say, they overruled us. And we said when we had that enormous position, given all the things you need to consider when you run a firm like SEB and politicians, general public, shareholders, employees and capital markets attractiveness that we would have a three-year – we committed to a three-year transition to get back to where we were, subject to everything else that can happen. That has now been concluded today. So now we’re back to normal. And therefore, I should say that our ambition as management is to live up to the target set by the Board and, therefore, the 300 million should be the upper range when we have the decision once a year to calibrate the capital structure, which we do in conjunction with the Q4 for the AGM to approve. Was that okay, Nicolas?

Nicolas McBeath: Okay. Yes, sure. Thank you.

Johan Torgeby: Thank you.

Nicolas McBeath: And then my second question on the cost target. So you’re guiding for 33 billion plus/minus 300 million, but assuming average FX rates for 2024. So just wondering if you could please provide what this would be on today’s spot rate, also taking into account the dollar strengthening versus the average from last year.

Johan Torgeby: I don’t know. Christoffer?

Christoffer Malmer: Yes. No, I don’t think we have that number. I mean, we’ll have to get back to you on that. So you want – what number you want the...

Pawel Wyszynski: I know which number.

Christoffer Malmer: Okay. Pawel knows the number.

Pawel Wyszynski: We’ll come back on it.

Nicolas McBeath: Could you tell how much costs you have in dollars?

Johan Torgeby: Dollars. I would – don’t know exactly. But let’s say that we have roughly plus – don’t quote me, 50% of the cost base in foreign currency, where euro is the largest and dollar is the second largest. Yes, it’s predominantly euro. So it’s not that much. It’s – the IT systems are predominantly priced in U.S. dollars. And we – of course, we have some staff in dollars, but that’s not so meaningful. We can probably do that divide for you, too.

Christoffer Malmer: We’ll come back to you on that one, Nicolas [indiscernible]

Johan Torgeby: But that kind of the current – the rate we use now is the rate, but I don’t know – I can’t tell you which one it is. It’s the one we have for the 33. So there is a 33 with current. So if the dollar moves from the average what we’ve used, but I don’t know that number, that’s when we might have an explanation where we will come in lower or higher for the dollar and euro. But the dollar is smaller, but I think it is significantly smaller than the euro exposure.

Nicolas McBeath: Right. Thank you.

Johan Torgeby: Thank you.

Operator: Thank you. Your next question comes from the line of Shrey Srivastava from Citi. Please go ahead.

Shrey Srivastava: Hi, and thank you very for taking my question. My first one is on costs. You’ve given this AirPlus 1 billion to 1.3 billion increase figure. And that to me already factors in 200 million extra implementation costs given the 2024 number included 200 million of one-offs. Of that, if you take 875 million for seven months more of AirPlus in 2025, that means you have SEK125 million to SEK425 [ph] million extra costs from consolidation net of synergies. So my question to you very simply is, do you think this guidance is fairly conservative and there’s a strong likelihood that you’ll come in under this? And I’ll ask my second question afterwards.

Christoffer Malmer: Okay. I’ll see if I can answer that question. So basically, if you’re looking at the current cost base run rate in AirPlus, it’s about SEK250 million per month. That’s the run rate coming into 2025. Now what we’re expecting to happen during the course of 2025 is to get that run rate of costs down to meet the run rate of revenues. Now the major drivers of that is going to be the three factors that I mentioned previously, the redundancy activities that are going on, the exiting of non-core markets and the IT migration plan. So this means that we will need to exit, and if you just take that in a straight line, and if you look at the current run rate of revenues, you will see that it’s quite a sizable reduction of monthly cost that needs to be accomplished. So what we are expecting at this point in time is that the SEK1 billion to SEK1.3 billion is the impact on those operating expenses as we run through the year. And then we have factored in, as I mentioned, in the starting base of SEK30.9 billion, we have SEK700 million, which is flat from last year then of implementation charges that we’re expecting to take in 2025. So the reason we’re opening up the range is to say that should there be a situation where we would like to accelerate something for changes or the challenging macro backdrop to make sure that we meet the target of costs and income leveling out, that’s why we’ve opened up that range. But those are the drivers, and I would say that to get to the run rate where we need to be for the end of the year, it’s an ambitious target. It should be and it is.

Johan Torgeby: But I wouldn’t say it is conservative to the notion that you think it is a high likelihood we will come in lower than these numbers. It is a best effort as accurate as we can, the picture of where we think we can go, and it’s an ambitious plan. It’s a very, very much hard work that needs to be done in the Kort business this year to achieve this.

Shrey Srivastava: Okay. Understood. Thank you. And my second one is just on capital return. You’ve obviously front-loaded the SEK10 billion deduction from capital with the fourth quarter. But obviously, you’re still at the upper end of your range. The macro environment is getting better. And obviously, you’ll continually be generating capital quarter-to-quarter. So is there a possibility that you can expand the approval and potentially deliver more than SEK10 billion of buybacks this year? Or would you say that the SEK10 billion is very much, what you think?

Johan Torgeby: SEK10 billion is very much what I think with what I know today. There is no reason we couldn’t change this, technically speaking, but there is no such plan. And I think the – you are absolutely right in the kind of more – a little bit benign outlook, but there are also a more distressed risk scenario for uncertainties going forward, and that needs to take into account. So my base case, which is just an explanation how we work is that the dividend will be the swing factor next year depending on how 2025 ends. And during 2025, this pace of share buyback would hold unless something really good or really bad happens, things might change. But I think it needs to be significant.

Shrey Srivastava: Understood. Thank you.

Operator: Thank you. Your next question comes from the line of Patrik Nilsson from Goldman Sachs. Please go ahead.

Patrik Nilsson: Hi. And thanks for taking the time. I appreciate many of the questions have been answered. But I just wanted to ask one clarification and one question on capital as well. And the first one was that you called out this SEK100 million to SEK200 million timing benefits related to the C&PC [ph] segment, if I understood that correctly. But shouldn’t you see these timing benefits in other segments as well, such as the Baltics? Or are they so small that they’re not really significant? And the other one was just on the RWA [ph] trajectory. So except for this Basel impact, do you think that there is anything else we should expect there? Or will the risk-weighted assets sort of grow parallel to how your volumes develop in the medium term? Thank you very much.

Christoffer Malmer: Thank you. So on the net interest income development, I think you’re right to say that this – in the Baltics, we should keep somewhat separately. The dynamics are a little bit different and, particularly, how the mortgages are priced and funded. But say that the SEK100 million to SEK200 million is coming across. You will see a little bit of that in the other part of the SEB Group as well. So keep that as a group number rather than a particular C&PC [ph] number. The second question on your capital, if I understand correctly, we have no updates on any impacts on our REA compared to what we have communicated thus far. So to your point, future REA expansion in line with volume growth apart from what’s been communicated.

Johan Torgeby: I would just add, the Baltic has much more fixed loans. So it’s a different dynamic and it’s much smaller. So I don’t know if it’s insignificant, but it’s much smaller even though there will be the same direction also when the ECB would lower it, but small.

Patrik Nilsson: Thank you very much.

Operator: Thank you. The next question comes from the line of Riccardo Rovere from Mediobanca. Please go ahead.

Riccardo Rovere: Good morning, everybody. Thanks for taking my question, so two or three, if I may. The first one is on deposit cost. Your fact book shows that is about 2.8% which is still higher than the level – much higher than the level that was reported by one of your competitors a few days ago. So can you explain what you have done in Q4 to bring it down, because it is down quarter-on-quarter? Have you brought transaction accounts to zero, whatever, if you can elaborate a little bit on that? Second question is, can you explain why for you, it looks like that the share buyback, buying shares at 1.5 times the equity or whatever it is, seems to be better than paying it cash. I really don’t understand. It is the say, both – let’s say both instruments are to return capital to shareholders. But one is SEK1 equal SEK1. When you buy back shares at 1.5 your tangible equity, SEK1 cost you SEK1.5. So I really don’t understand why in your thinking was preferable to go for SEK10 billion buyback, missing the cash DPS and not doing the other way around. And the other thing I wanted to ask you is, okay, now you say that you are at 290 basis buffer, okay, fine. But this is just because you have front-loaded that whole buyback, which means that in Q1 or in Q2, you’re going to be 310, 350, 370. So is the way – is this the way we should see the way you think about solving the problem, just upfronting the whole buyback? So this is – because this is arithmetic at the very end of the day is because you will accumulate capital in 2025, you just upload – upfronted everything. So I was wondering, is this the way you think about bringing the common equity Tier 1 ratio within the range, just at the very end of the year, uploading – upfronting of the whole impact? Is this the way you’re going to work in the future, too? Thanks.

Christoffer Malmer: Thank you very much for your questions. So, if I start with the deposit rate that you mentioned, it’s hard to comment on how other banks are reporting and what’s included in their numbers. But the decline that you see from Q3 to Q4 is reflecting lower deposit rates paid. So, the pass-through of the lower rates that we have seen across the bank, it’s been on savings accounts in Sweden, and it’s also been on the equivalent accounts in the Baltics. So that is a reflection of the lower deposit rates paid and also both in private and corporate. Your second question, if I get it correctly, on the structure of the capital repatriation program and in relation to the bank’s valuations. I think what goes into the plan is not so much considering and marking to market our actions depending on where the share price or the valuation is, but rather to have and provide a consistency and a continuity of a stable growth and stability in growth and keep stable our ordinary dividend, and also have a continuity in our buyback program. And we believe that over time, that is something that will help us grow EPS even when net profit is not growing as quickly. So, we think there’s a value in providing visibility and continuity on an ongoing share buyback program in the size in the order of magnitude that we have. And then we have added the special dividend to get us inside of the range of 100 to 300 basis points. So, we believe that the visibility, stability and continuity in those three tools is as a value and not on the – and a broader theoretical part of the capital repatriation plan. Your final comment, if – I’m not sure if I exactly understand the question, but you’re right to say that the deduction of the full year program that we have gotten approved from the Swedish FSA is what takes us down together with a special dividend inside of the range of 100 to 300 basis points. And as we commented previously, we have an ambition and we’ve communicated it to be within that range. And going forward, if we were to move above that range, we’d have the conversation again how and what actions we need to take and consider to propose to the Board to get us down within the range. If we continue to operate within that range or if we go down because of growth in our business, well, then we’ll continue to operate within that range. So, we are now in the range. And as long as we’re in the range, we don’t see need for further proactive actions. Should we go outside the range, that’s when that conversation comes back to the agenda.

Riccardo Rovere: Okay. Thanks, Christoffer. But why is the buyback preferable to the cash? Because the buyback is up. SEK10 billion is larger than what you have done last year, if I remember well, I’m pretty sure about that. And then the EPS is stable.

Johan Torgeby: Payments, Riccardo, it’s the same we had in the last quarters of SEK2.5 billion, but you’re right. The sum is higher. Well, I say, there are different schools of this. I hear which school you have, and that is, of course, the one, which is price to book type of school. But here, I must sometimes refer to the shareholders. We speak to all of them, and there are many preferring share buybacks from dividend regardless, they said the repatriation they find – they look only on the EPS and they have that kind of senses. We have most of the shareholders, they’re indifferent. And then we have some who would prefer cash. But in the end, it’s really the shareholders that we try to read as well as we can to find strike the best balance by continuously now with the SEK10 billion, it’s a 3% EPS accretion every year, which helps the share price if the PE is – well, which helps the share price and then having the majority of the repatriation in cash. And there are many other benefits for the share buyback, which is not really relevant for the valuation, but I get your point. I know it very well. And that is, of course, that share buybacks are easier to cancel when politicians and regulators and other things would like to give a dividend ban. I was very jealous of the Americans who continue to pay dividend in COVID. The other thing is there’s increased flexibility to use that over and beyond the dividend policies. You can change it during the year, increase it, reduce it, which also has very large strategic importance for running a bank. And the last thing I would say that implied in your question is that more capital repatriation is better and less is bad. And that’s also a thing, which is very subjective. Many, many shareholders are – actually like to be the last one in the queue. And if you can have a decent return on equity that is competitive, you prefer to have more rather than less capital. But that’s also – we are 260,000 owners of this institution and everyone has a slightly different sort of opinion. Our job is to try to get it as right as we can together with the Board, and this is the proposal for 2025.

Riccardo Rovere: I understand that, Johan, I just want – the stock is down 3%, more or less, which is the buyback of one year, the EPS accretion. So the buyback, the EPS accretion of one year is wiped out in 30 minutes. That’s the thing is happening today right at the moment. So I don’t know if there is – I honestly admit it. I don’t know if there is a fiscal incentive for shareholders in Sweden in a buyback rather than a dividend. Maybe there is something I personally did not know, maybe I should know. But missing the DPS, consensus DPS is costing you today the whole EPS accretion of one year from the buyback. That’s what’s happening right now on the market just you know.

Johan Torgeby: Thank you.

Operator: Thank you. We will now take our final question for today. And the final question comes from the line of Jens Hallén from Carnegie. Please go ahead.

Jens Hallén: Hi. Thank you and it’s a short one because it’s a clarification on the last answer you gave. And can I just ask, is there any operational reasons why you’re moving from semiannual buyback approvals to an annual one, except that, of course, you get within the CET1 target range. I can’t see any. So that’s, I guess, is where my question is coming from.

Johan Torgeby: Yes. No, the major reason is, of course, that we did an annual complete reset. And when that gets approved, regardless of what we actually buyback or not, you deduct it. And then we have taken the decision for the year. That was the reason.

Jens Hallén: Okay. Because I think when we talked about it previously, the – I think we’ve discussed that you prefer to do semiannually because you, then you don’t need to tie up the second half years’ worth of capital because effectively, there are no meaningful reasons for it. But is this the way you plan to do it now annually? Or is this just a one-off reset to get within the target range?

Johan Torgeby: Good point. We start with quarterly and then semiannually and now annually. We haven’t discussed and there’s – I have no answer to guide you beyond 2025 if we continue with annual, semiannual or quarterly. So, I think that’s going to be a fluent discussion given whatever you acknowledge around you. So, it could change, but we haven’t discussed that if this is – at what frequency you apply for your share buyback volumes. But I’d say for me, it’s very nice to have SEK10 billion approved at the beginning of the year. So, it gives a little bit extra stability as well given that we needed to do a 10% or so repatriation equivalent for the 2025.

Jens Hallén: Okay. Fair enough. Thank you.

Operator: Thank you. I will now hand the call back to Johan for closing remarks.

Johan Torgeby: Okay. I thank you very much. That’s 1.5 hours. So, I wish you all the best. If there’s any more questions, we’re open. So just ship them in, and I’ll see some of you in the coming days. So, thank you for participating.

Christoffer Malmer: Thank you.

Johan Torgeby: Have a good day.