Avanza Bank Holding AB (publ) (AZA) Earnings Call Transcript & Summary

Good day and thank you for standing by. Welcome to the Avanza Bank Interim Report January-June 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CEO, Gustaf Unger. Please go ahead.

Hi, and welcome. By my side today, I have Anna Casselblad, CFO; and Karolina Johansson, IR Manager. Avanza had a strong first half of 2025 despite turbulent macro. Unpredictable tariff announcements and geopolitical conflicts clouded the near-term outlook and net flows in Q2. Long-term outlook for increased savings remains positive. We have in Sweden increased real wages, lower interest rates, meaning lower housing costs and also stock markets have rebounded quickly from the early April fall. Bottom left, you see that the savings capital is up 4% in H1 and 7% in Q2. That was driven by market appreciation and net inflow. Top right, you see that customer acquisition is on track for another strong year with H1 up from last year. Bottom right, we see that net inflows in H1, on the other hand, is slightly weaker than last year, where the macro uncertainty has put many suites in a wait-and-see mode. I think customer activity held up well in the quarter despite a difficult market environment with rapid changes in the sentiment. Top right, you see that the number of brokerage-generating customers remained high in the quarter. And bottom left, you see that brokerage margin was stable. It was negatively affected by lower share of foreign trading but positively affected by the standard segment playing a larger role this quarter. Bottom right, we see that turnover in foreign securities is still high compared to historical levels but negatively affected by the unpredictable U.S. precedent in the quarter. The long-term trend of increased foreign trading is strong with our customers having a home bias of 77% at the end of the quarter in their equity portfolios. That's not geographically diversified portfolios to say the least. Fund customers were net sellers in the turbulence in April, but net buyers in total, which, together with the large market fluctuations made the average fund capital decrease compared to Q1. This reduced mutual funds income. In the Q1 results presentation, I showed that our customers' U.S. exposure in their equity portfolios was 13%. Fund customers are more exposed to the U.S. market due to the popularity of global funds. My estimate is that fund customers hold roughly 35% U.S. exposure. Fund inflows was SEK 5 billion, which is high compared to Q1, but weak when looking at 2024 due to the wait-and-see mode of Swedes. Our strong brand is an important asset and competitive advantage that we built for decades through customer focus and innovation and where the daily interactions with customers are vital parts of the development of Avanza. This has resulted in a loyal customer base with a low churn of 1.7%. And in the quarter, Avanza is ranked as one of the highest regarded companies in Sweden, together with names like Volvo and IKEA. The strong brand is also important for our employee value proposition, where being able to attract, develop and retain the best talent is key. And this quarter, Avanza is ranked one of the most attractive employers among students in Sweden. An important part of our strategy and to reach SEK 2,000 billion in total savings capital is to focus on our core business, which is savings and investments in Sweden. 2/3 of our customer savings are estimated to be held by other banks, half of which is considered addressable. We have a great opportunity to increase share of wallet where we need to make both smaller and bigger enhancements. One part is to constantly improve the offering so that we also, in the future, have the best platform. During the quarter, we have added 2 new European markets, Spain and Switzerland, and launched analyst recommendations and target prices as decision support. An improved mortgage offering is another possible key to free up customer savings capital with other players who lock in their customer savings in exchange for decent mortgage rates. I think that Stabelo backed by Swedbank will allow us to significantly improve our mortgage offering later this year. Our existing customer base is an important source of future growth. The Sigma Stock acquisition was finalized 1st of July, creating an opportunity to increase our addressable market. Historically, Avanza has focused on the Do-it-myself and Help-me-do-it segments. To accelerate growth, we need to become more relevant for those less confident in making their own investment decision. We will develop products to attract the large do-it-for-me segment while remaining fully digital, starting with the private banking segment. Our focus now is on integrating the new product in the Avanza experience. And the ambition is to launch the new discretionary mandate product around the turn of the year. Before handing over for a presentation of our financials, I'd like to thank Anna for being a fantastic colleague and CFO, always with a smile irrespective of workload. And I think this will be your last -- I know this will be your last, but I think of 18 quarterly presentations. Over to you, Anna.

Thank you, Gustaf, and good morning, everyone. As Gustaf already said, we are reporting really strong results today and are once again proving resilience to changing market conditions. Operating income decreased compared to Q1 due to lower trading-related income, while NII increased driven by higher deposit volumes. Looking at H1, operating income increased by 18% compared to last year, driven by all income streams except for NII that decreased slightly. Our operating expenses are developing according to plan and increased by 6% in the quarter. This resulted in a net profit of SEK 600 million, which is 15% below record quarter Q1, but nonetheless, a very strong result. Looking at January to June, net profit increased by 23%. Return on equity for the quarter ended up at 37% and earnings per share at SEK 3.81. Our income mix is reflecting the events in the world around us, and the business model is once again proving resilience to various market conditions with an increasing NII and decreasing trading-related income streams, both as a result of customers derisking. Trading activity decreased compared to Q1, which, as usual, was a result of the general market sentiment, but also a result of 4.5 fewer trading days in Q2. On the other hand, if we zoom out the perspective a bit and compared to last year's figures, trading activity has increased substantially, and we are also seeing a higher number of brokerage-generating customers. Looking at the trading mix across the customer segments, Private Banking and Pro accounted for 26% of the brokerage, which was lower than in Q1. This is somewhat unusual in a more turbulent market environment where the standard segment are usually the ones who tend to become more passive. Looking at the brokerage margin, it was stable at 11.4 bps compared to 11.5 bps last quarter. Slight decrease was driven by a lower share of trading in foreign securities. However, the standard segment accounting for a higher share of trading mitigated the negative effect. When it comes to FX income, this was negatively impacted by 20% lower turnover in foreign brokerage-generating securities compared to Q1, driven by customers being more hesitant to U.S. exposures in their portfolios, particularly in the beginning of the quarter. Here, we saw an increased share of turnover in foreign securities generated by private banking and Pro customers. This also partly affected FX income negatively as private banking and Pro customers have better prices for FX. Net fund commissions decreased by 7% due to lower average fund capital despite fund capital being higher at the end of the quarter. The fund margin was stable at 24.9 bps compared to 25.2 bps in Q1 and was 25.1% at the end of the quarter. The share of capital in index funds was also stable, only increasing by 0.2 bps to 48.6 bps. Other income was also negatively affected by the market environment with lower income from Corporate Finance due to the sharp shift of sentiment for IPO transactions and income from Avanza Market also decreased. The turbulent market environment is evident also when looking at the NII. Deposit volumes, looking at the outgoing balance increased to close to SEK 10 billion compared to Q1, driven by customers' lower risk appetite and the dividend season, which resulted in higher surplus liquidity. Looking at the intraday liquidity, this has been even higher at times as customers at some point have been net sellers of securities in the quarter. Looking at the lending side, mortgage volumes kept growing while the lower risk appetite drove customers to decrease margin lending. The average rate for internally financed lending decreased to 3.27% from 3.4% and the lending income decreased slightly. The policy rate has been kept stable throughout the main part of the quarter, but on June 25, the Riksbank made a 25 bps cap. This has a direct effect on our mortgage rate, which was cut accordingly. We also decided to reduce the margin lending rates by an average 34 bps. So far throughout the rate cut cycle, we haven't been more restrictive with capping the margin lending rate. To make sure that we have a fair offering for our customers as private competition, we made a decision to make a slightly larger cut this time. Moving on to the interest cost side. Our interest expense has increased due to higher deposit volumes on our savings account. The average annualized rate on deposits decreased from 0.97% to 0.91%. The amount of customers' deposits in interest-bearing accounts decreased and amounted to 51% at the end of Q2. Since the policy rate cut in June, we now only pay interest on transactional accounts for the Pro segment, and we cut our savings account rate by 25 bps to 1.50%. All in all, NII increased by 8% since Q1, and this is contributing well to the overall income this quarter, and we'll continue to do so also going forward even though we will see some effect of the lower policy rates. Our costs are developing in accordance with our communicated plan and increased by 6% compared to last quarter. Personnel costs increased by 10% compared to Q1 due to a higher average number of employees. Other costs also increased, mostly connected to the cloud journey. Marketing costs were seasonally lower. And the cost guidance of 11% increase where the full year stands. As you can see from the table, we have further strengthened our capital position, especially looking at the risk-based capital surplus. In May, we successfully achieved AT1 capital of SEK 800 million. And this is something that we have aimed to do for a long time as we see it as a natural part of our capital structure, and that also paves the way for future savings capital growth. The issue was heavily oversubscribed and we paid 3 months STIBOR plus 325 bps, which was the lowest spread and, in other words, the lowest perceived risk for investors that an unrated Swedish bank has issued us since 2008. And that also shows the strength by Avanza. With the AT Capital, we are now better prepared to cater for increased deposits and the leverage ratio requirement. And as you know, we are in the process of closing our external savings account, where we now know that partners that account for approximately half of the external deposits today will not migrate it to their own platforms. And that means that if customers don't actively move that, the deposits will stay at Avanza. As I mentioned earlier, we have seen increased deposits this quarter and this year due to customers' derisking as well as dividend inflows. The pressure on the leverage ratio was mitigated by issuance of AT1 Capital, implying a strengthened ratio compared to last quarter. We still have a good headroom to the total leverage requirement of 3.5%, including the Pillar 2 guidance, and we can handle increased deposits of SEK 38 billion before reaching it. And I would also like to emphasize that we didn't audit the quarterly figures for Q2. It's only the Q1 results that have contributed to the capital base. And with that, and since this is my last quarter with Avanza, I would like to take the opportunity to thank you all for a good collaboration and interesting discussions during the years and also thanks, Gustaf, and the Avanza team for an excellent time here at Avanza. And I wish you all the best.

Thank you much, Anna. To sum up, before we open up for questions, I'd like to summarize my view. I think we delivered a solid result despite turbulence in the world around us. I think we're making good progress with our strategic priorities and I think we have strong employee engagement around the direction. The long-term outlook for increased savings in Sweden remains positive. And last but not least, Avanza is well positioned to capture future savings market growth and to handle short-term possible uncertainties. Thank you.

[Operator Instructions] We will now take the first question from the line of Jacob Hesslevik from SEB.

If we start with your CEO letter, Gustaf, you wrote that circa half of the deposits in external savings accounts are today with partners that will allow the deposit to remain at Avanza while the remaining 50% will be up to the customer. So is the 50% referring to current deposit volumes in SEK or is that 50% number of external partner banks left on the platform?

Thank you, Jacob. So the customers of Sparkonto Plus, they are both customers with Avanza and with a partner bank. So what we have tried to settle and managed to settle with all 7 of our banking partners is what happens if the customers do not make an active choice before we reach the end of lifetime of this product? And with roughly half of the volumes in Sparkonto Plus today, we have come to the agreement that if the customer is not doing anything, the volumes will remain with Avanza. Does that clarify Jacob?

Yes. I mean, that sounds positive, that is, on the volumes. And then the second question is on the divestment of Stabelo and how it will affect Avanza. Will you continue to distribute their mortgages? And do you expect the LTV level to increase when the funding now comes from Swedbank? And lastly, how will the profit sharing setup look between you and Swedbank?

I think having a good mortgage offering is key in the Swedish savings market, as I mentioned in my presentation. Many of the incumbent banks, they lock in savings capital by only giving decent mortgage rate contingent that the customer keeps his or her savings with that bank. That has been a challenge from our side, and that's one of the reasons why we have a very attractive mortgage offering to our prized banking customers. But to our standard customers, we have had two external offerings with Landshypotek and Stabelo. And if we focus on the Stabelo offering, it allows LTV only up to 60%. Now the majority of our young customer base, they cannot afford a house or a flat only going up to 60% in LTV. So for -- we have been thinking hardly for months and months how to improve our mortgage offering. And one unlocking was an improved LTV from Landshypotek I think a few months back, up to 75%, if I recall correctly. And with the rationale from our side to sell our shares in Stabelo to Swedbank is partly that it is -- it looks like a good financial deal for us, but mainly that we think and hope that this will significantly improve our mortgage offerings towards our customers and hence, unlocking savings capital with other banks. So the short answer to your question is yes and yes.

Okay. So if the LTVs then can come up to 85%, 90%, the Stabelo offering should be quite attractive towards your customer base, which has an average age of just around 40, correct?

Exactly. 37 is the average age of customer. And when it comes to the financials between us and Stabelo, that's something that we haven't communicated and will not communicate.

But is it fair to assume that the existing margins with the existing contract will continue in the future with Swedbank as a new owner? Or is it up for renegotiation?

No, I have no new information there, Jacob. We have a distribution agreement with Stabelo today. We have it tomorrow. And as with any contract, it's renegotiated every 3 years or something like that. But we will continue to be a distributor. I have high hopes with the constellation of Swedbank and Stabelo to make this product much more attractive and hence I hope for much higher volumes.

Okay. That sounds good. And I have a very last question. On net inflow, it was negative for both Private Banking and Pro in the quarter. I would have thought that these clients were slightly more sticky compared to the retail clients. And hence, if you could provide any more color on what's going on here would be appreciated.

Yes. I think there are two factors that are important here. One is related to the market environment, where a number of larger customers have decided to get an exposure now outside the stock exchanges. So those money, I think, will come back when we have a different sentiment in the market. The other factor is that how we calculate net flows for the Private Banking and Pro segment is not consistent with how the market does it. So if a big saver becomes a customer with Avanza and does not sign up to become a Private Banking customer day 1, he or she will be registered as a positive net flow into the standard segment. If that person then after a year or after a week decides to become a prized banking customer that is not shown as a net flow in Private banking. So if I were you, I would look a little bit more at the development of the savings capital in this segment. And as you can see, the Private Banking and Pro segment savings capital grew much faster than the standard segment.

Okay. That was new information for me. Thanks for the clarification. Wish you all a good summer, and thanks, Anna, for these years.

Thank you, Jacob.

We will now take the next question from the line of Ermin Keric from DNB Carnegie.

Maybe I can continue on the flows actually. Do you see any tendencies of increased competition? And also, you mentioned that kind of regular flows you have are SEK 2.9 billion per month roughly. And then on top of that, we have the pension premiums of, call it, SEK 400 million. So we're almost up at SEK 10 billion. I mean is there basically no discretionary inflows then? Or have you seen some breakages of the recurring ones? Because I think that the numbers I just mentioned are on a rolling 12-month basis.

Yes, that's a fair observation, Ermin. I mean, you constantly have an outflow for consumption, which you need to fill with inflows. So if you would look at the gross numbers, so the gross inflow and the gross outflow, those numbers are much larger than when we look at the net inflows. But mathematically, you are correct. When it comes to competition, do we see tougher competition today than a few years back? I don't think so. I hear and I read that a lot of players are focusing more on the private banking segment. I think that's understandable. It is a large segment. It is a profitable segment. It is a segment that is growing faster than the overall Swedish market. So I'm not surprised. But do I see it in the day-to-day interactions with customers? No, not really.

Okay. And if we look at the cost line, now you beat the consensus expectations in both Q1 and Q2, but you keep the guidance of 11%. So how should we think about that? Because then implicitly, you'll have a quite high exit rate of the year if we think in year-over-year terms in like a Q4. So does that mean we should have a much higher cost inflation in 2026 and '25? Or is there some seasonality or something that's causing this kind of trajectory?

No. The seasonality among costs or expenses is rather in Q3, where we have lower costs due to our employees taking out summer vacations. But I would say that we are focusing more on the cloud journey, which is in line with our plan, and also the acquisition of Sigmastocks, which will now take on even further work since the beginning of July started working with more closely with Sigmastocks and integrating it on the platform. So those are the two main focuses for the second half of the year, implying also that the costs for the last 6 months of year will increase. So that's why we iterate the overall cost guidance.

And Ermin, mind the communication from our side that the average cost increase during the planning period will not exceed 8%. So that limits our cost increase next year. So I wouldn't be very worried about a lot of hangover of late cost increases in 2025 making the cost increase in 2026 unmanageable or something like that.

Okay. That's great. And then one last question would be going back to the partnership now with Swedbank and Stabelo. As you said, I think many of the incumbent banks have used the mortgage to kind of lock up or lock in the savings capital as well. So what's the incentives for Swedbank here? Because I suppose you will now then have a stronger competitive offering on the mortgage side, which can lock in quite profitable savings capital. So will we need to share anything there in terms of kind of the rest of the capital you get from those users? Or kind of what's the incentive for them then?

We have no side agreement with Swedbank. So what's their rationale? I think this would clearly be positive for us. And we'll have to wait until November or something like that when the deal is expected to close. Hampus and his crew in Stabelo I think are very motivated to have a much improved offering by then. But when it comes to Swedbank's rationale, I think you'd better ask them.

Fair enough. Have a nice summer, and thank you, Anna.

Thank you. Have a nice summer.

We will now take the next question from the line of Enrico Bolzoni from JPMorgan.

The first one is on customer growth. You historically have been very, very strong, and the print in May and June was perhaps a bit softer than in the past. Can you just give some color on what might have caused that and whether you expect customer growth to accelerate again throughout in the second half of the year? So that's my first question. My second question, just a clarification on costs. Thanks for what you already said, but can you confirm therefore the total cost in the third quarter will be higher than in the second quarter despite the typical seasonality of the summer? And finally, on the external savings account, just a clarification. You say that 50% of accounts will be allowed to remain on Avanza. But then for the other, you say will require an active decision, which imply that this money are not on Avanza, but are on the third-party banks. I'm just trying to understand just the technicality. Are actually all this money technically all on Avanza and some will be able to stay and some not? Or it works in a different way? And related to that, I wanted to ask you what proportion of these savings, once they move to Avanza, you think will remain in deposit? And what proportion you think will be instead invested near term?

Thank you, Enrico. I'll try to remember all your questions. The first one...

On customer growth.

Was on customer growth, thank you. So especially in May, June, why was it weak? I don't know where you are, how this consumer sentiment is. But in Sweden, it has been very soft, both consumption, and in our terms, savings. I think a lot of us in Sweden are a little bit shell-shocked from what's happening around us when it comes to trade wars and when it comes to geopolitical tensions. And my view is that we are a lot in a wait-and-see mode in Sweden. So when I have friends who are out selling their houses, there are very few people coming and looking and showing interest, which is very unusual in Sweden. When you talk to other firms in the consumption sector, the consumption is weak. And there was a preliminary GDP data coming out just yesterday around in May, which was very weak in Sweden. So I think a lot of Swedes are in wait-and-see mode. Now what does that mean? Because the Swedes have more money available this year compared to last year and compared to 2023. My guess is that those money remains on their salary accounts with the big banks. And the step to move them from there to long-term savings with Avanza, that drive has been less strong in May and June. And I think that, that will normalize when we get a little bit less shell shocked population here in Sweden. Your second question was?

On cost.

On cost, yes. So we don't guide. I think we're doing -- we're very transparent guiding on costs for the year. We do not guide on cost quarter-to-quarter. So you need to do the math there when it comes to Q3 and Q4. When it comes to your third question, that was...

External deposits.

External deposits. So I mean, the customer is a customer with Avanza. But legally, the money is -- deposits are very well protected in the law in Sweden. And technically that customer is a customer with his or her deposit with that partner bank. So we have been very mindful to clarify with all our 7 partner banks, what happens if the customer do not take a decision? And at the last day when the product ceased to exist, what happens then? So that is what I clarify. If the customer does not act then half of the volumes will automatically be moved from Avanza and half of the volumes will stay with Avanza. Now I hope and we hope that the customers have chosen this product not because of the partner bank, but because of Avanza, and they want to gather all their savings and have it readily available for going into risk assets and hence to keep it with us. But that all depends on how the customers will react during this coming quarters. Then it was a fourth question, I think...

Yes, it was related to this one on what proportion of these deposits do you think might be invested once they are on Avanza? Rates are lower in Sweden, so perhaps I was just wondering whether you think that they will be converted quite quickly in equities or in funds.

Yes. I can give you some -- I don't know, but I can give you some data points to guide you in making up your own mind. By the end of the quarter, the customers held, on average, 8.9% of his or her savings capital in cash with us. So 8.9%. That gives us this SEK 88 billion that the bank has at deposits. In the end of the last quarter, it was 8.4%. A year ago, it was 6.9%. So when looking a year back, you can say that currently customers are risk averse. They have a lot of cash, they have a lot of money readily available to invest in risky assets. That would speak for that when we get money from, say, Sparkonto Plus, that they would invest it in risk assets. But if you look further back, the 5-year average, it's 8.6%. And the 10-year average is 9.8%. So maybe customers are neutral now with their allocation. And I cannot give you a better answer than that, Enrico. It really depends on customers -- yes, decisions.

We will now take the next question from the line of Martin Ekstedt from Handelsbanken.

So I just wanted to check around index funds. So they have now been relatively flat for 3, 4 quarters at around 48.5%. And by the way, thank you for giving us that number now and not just delta from one quarter to the next in the report. So do you think the shift from active to passive or index funds have plateaued now? Or do you think it's a temporary plateau?

So my view, Martin, is that if you look -- if we start with the Swedish market, I think the Swedish fund market still has a fairly long way to go in reallocation from active to passive, i.e., a higher proportion will in Sweden be in index funds in 3 years than it is today. If you look at Avanza, I think we have taken -- our customers, they have made the majority of that shift. I think we will still see an increase, but I think we're plateauing slowly. So the delta is still negative, but I think we're flattening out. That's my personal view.

Okay, okay. And then if I could do a follow-up on that one. So net fund commissions is almost 3/4 the size of brokerage income as you look over the last 3 years, say in your P&L. So given the importance of this line item, there's kind of an information skew in your monthly data towards brokerage income. And we don't get a lot of information around the fund income. Do you think you might consider reporting this on a monthly basis, fund volumes? Yes, just fund volumes would be helpful.

Yes. Fair point, Martin. We'll notice that and we'll think about it.

Okay. Great. And just a final one for me, if I may. Do you have any comments at all on the takeover rumors in Swedish media on the 2nd of July?

It's hard for me to comment on rumors in the market. I mean, my job and Anna's and Karolina's job is to continue to develop Avanza as a company and to develop the customer experience and to keep customers as happy as possible. Who owns and how the ownership structure looks like, it's not a question for us. That's a question for the Board and the shareholders. And I think that, Sven, our Founder and largest shareholder, was pretty clear in media here last week when the rumors -- I think it was last week when those rumors came.

We will now take the next question from the line of Andrew Lowe from Citi.

I've got two. The first is on your net interest income specifically and the interest income that you earn on your liquidity book. I think it's a bit higher than most people have been expecting. Can you helpfully give the period start and period end size of your liquidity book, we could take the average of those two, for example. But then if I apply that average to the average 3-month STIBOR rate, then you'd come quite a lot short of what you've reported. So the question is, is there anything funny going on with the margins this quarter? Or is the higher-than-expected interest income, does that relate to the fact that the liquidity book over the period of the quarter average much higher than you would be if you did the simple average? And maybe that's to do with the sell-off at the start of the quarter and people holding higher cash balances around then. So maybe if you could give, for example, the average size of the liquidity book in Q2 that would be really helpful. And then the second question is just relating to comments that Anna made on the margin lending and the pass-through was higher than it's been running at. I'm just curious if you can give any forward-looking comments about how you think the competitive dynamic there will evolve in the coming quarters.

Okay. First starting with the flows. I would say that it's more -- we cannot see any shifts when it comes to like the yield on the treasury portfolio. So it's rather that certain days we have seen quite high liquidity, for example, like a bid offering related to a corporate event in June, for example. Maybe deposits go up for a couple of days. And we also have had the dividend season. So it's definitely higher volumes that have had a positive effect on the treasury portfolio. And you can not only just look at the -- it depends on also -- because we want to have an evenly maturity structure, implying that it's not that we just buy to hold and we find it like a 5-year bond. So we can -- if we see like we need to, for example, invest with a 3-year maturity, that could also affect the yield for the quarter. So that's why we don't disclose that. So I think it's hard to say that we can just say that we can see that the overall average liquidity has been higher in the quarter.

And also, there are some other effects. If customers sell off on a larger scale, like was it April 7 with the turbulence, they typically wouldn't place it with their savings accounts because it's really money that they want to have available to go in next hour or next 24 hours. So then the interest cost for us is much lower if they have it with the transaction account. That effect you also have. Then, on the other hand, Oliver, our Treasurer, he did not really dare to invest our treasury book in higher yielding paper because we didn't know and he didn't know how customers would react. Would they want to use their deposits next day? So there are certain positive effects on net interest income and there are certain negative effects.

Just maybe to summarize on that point. So should I take away that the sort of big pick up is the volume thing not a margin thing? Is that the conclusion?

If you disregard the margin effect of customers increasingly holding short-term money on transaction account instead of savings account, where we pay less interest. But on the asset side of the balance sheet, I would rather say that during the quarter, Oliver was careful and conservative in placing that additional deposit coming in because we didn't know, would customers go risk on again? And that means that we didn't get the extra basis points of placing them with bonds or longer-term commitments.

Okay. That's really helpful. And then just on the margin point, that would be really helpful as well -- on the, sorry, margin lending.

Yes. We have always said that we want both the margin lending when it comes to pricing of all our products, except for the mortgage rate, which is linked to the policy rate. We say that we want a competitive offering, and that is always the competitive landscape that will be the most important part when we decide which rates to offer. And now we decided that we wanted to do a more aggressive decrease in prices because we saw once pricing comes where we thought that we could be more competitive. So that's why we decided to do that. But also on the other hand, looking at -- we have -- since we have higher volumes today, I would say that it's quite compensated by volumes.

We will now take the next question from the line of Markus Sandgren from Kepler Cheuvreux.

I was a bit late so maybe you've already explained this. But I was thinking about your brokerage income is down 14% and the number of trades are down 7%. So does that mean -- or is the -- so that means the average price is obviously 7%, 8% lower. Is that just related to that there's fewer trades in crypto and U.S. stocks and so forth? Or is it something else that I'm missing? And the same goes for the currency income, that it also seems to be lower priced on average.

Yes, as we said, like the brokerage margin was quite stable in the quarter, but it is always a mixed bag of which customers that are trading in what markets, the size of the trades and so on. So it's -- and then, of course, on the total, we have a 4.5 fewer trading days, but we could see the overall turnover decreasing.

Okay, okay. And then secondly, I was thinking, can you say anything about how your plan for another country is going? I mean, have you done anything during the quarter? Anything that you can share?

So that's one important part of our strategy in 2030. So we have a team in place looking at this to decide how, where and when. And a lot of work has been done during the quarter, but nothing specific concrete that I can share with you, Markus.

We will now take the next question from the line of Ian White from Autonomous Research.

Three from my side, please. First of all, can you just clarify for us, to what degree is the decline in FX margins in the quarter due to the introduction of currency accounts for Private Banking clients back in February? Maybe you could just call out what share of FX volume was done in those new currency accounts, please. That's question one. Secondly, what has been the retention rate of maturing third-party deposits so far? I know it's relatively small numbers, but are you able to provide us with a split of the deposits that were recycled into, say, Avanza savings into transactional accounts and that left the bank altogether? That would be interesting too, please. And just the last one. I just wanted to follow up on the comment you made earlier, the stuff around the disclosures. Did I understand correctly that basically a new large customer could be treated differently from a stock and flow perspective when it comes to the reporting? So the flow might end up being reported on the standard, but that same client's stock of assets might be in Private Banking? Did I get that right or I misunderstood, please?

So if I start with your last question. You have flows that are in typical traditional banks called retail referrals. So when customers move up from being a retail customer to a private banking customer that is reported as a net flow for Private Banking in the market and with other banks. With Avanza, we do not add that to the flows of Private Banking. So if you become a customer in January to Avanza, you bring in SEK 100 million, and in May, you decide I want to be a private banking customer, those SEK 100 million did show up in January as a net inflow to the standard segment and it does not show up as a net flow to Private Banking in May. However, the savings capital is, of course, reflecting this SEK 100 million. So that's why I mentioned that it can be good to look also at the development of the savings capital. The reason for not changing this to market practice is that we wanted to have -- we didn't want to destroy our long time series for you. But does that clarify that to you, Ian?

It does. That's very clear. Yes, I understand that. That's super clear.

And then the first question, I forgot now.

It was related to FX.

Okay. So the decline in FX, is that attributable to the introduction of currency account. I would say no to a very, little extent. We still see customers slowly but surely starting to use that product. So that has had very little effect in Q2. You had a second question also.

Retention rate.

Yes. So what's our experience so far with the retention rate of the external deposits. It's very difficult to draw any conclusions of what we have experienced so far because one of the banking partners acted to get the volumes out by reducing the rate from north of 2% to 1% and then even down to 0%. So yes, we have data on what happened with those flows, but that's not representative of what will happen in the future where banks -- these partner banks will want to retain the volume. So I think the best we can guide you is what we have agreed will happen by the end of the period, which is 50-50.

Okay. And also just wanted to say thank you to Anna, and all best wishes for the next challenge.

Thank you.

[Operator Instructions] We will now take the next question from the line of Nicolas Vaysselier from BNP Paribas Exane.

Can you hear me?

Yes.

Yes.

Just two quick ones. The first one, on cost. It's a bit slightly in a different way, but could you concretely tell us what do you expect is going to drive the acceleration on cost in H2 given that the run rate for H1 is significantly lower than your guidance, and the guidance is reiterated. So is it like the spending on cloud migration are H2-dated or something like this or some inflation from contract renewals coming in H2? And then my second question would be on the deposits side. So the markets are still pricing one rate cut towards the back end of the year. And if I do a review of your current 1.5% remuneration in the savings account, yes, it kind of screams okay versus the incumbent players. But if we look at the savings platforms or even non-net, you seem to be lower. So I'm wondering whether or not you would have some willingness to not do a 100% pass-through on that cut in order to try being more competitive and attract more of those external deposits that you're looking to reinternalize.

I mean, on your last question, with every rate change that we make, apart from the mortgages where we 100% follow the policy rate because that's an agreement with our customer, but when it comes to our deposit products and when it comes to the margin lending product, every decision we take is based on factors that you mentioned. Now if you look at the market, who offers better savings account rate than we do? It's essentially banks who have a very risky asset side, i.e., consumption credit banks and banks that have an expensive alternative funding source. So we have no appetite to be on par with those risky banks, but we want to have a good offering to our customers. So it's a little bit of a blah, blah answer. I know that. But we'll have to wait and see. I think we have a pretty good offering today when it comes to savings account. We've been thinking a little about what's the term deposits to have an even better offering for those who wants to put money aside for 3 or 6 months. But if you look at the Swedish krona yield curve, I mean, it's almost inverted. So it's hard to give very good rates even when you lock it in 3 or 6 months.

And on the cost for H2?

On the cost for H2. So I think we guided fairly transparent when we delivered the Q4 report that we expect cost increase this year to be 11%. We also guided that of those 11%, around 3% would be eaten up by inflation. That 3% would be investments in our core business, Private Banking and pension. And that 5%, so that's majority, would be investments in making us as digital on the inside as we are on the outside, including the cloud migration. If you look at those line items, I mean, inflation is going on all the time. When it comes to the second item, so growth in Sweden, basically, we have the acquisition of Sigmastocks that was finalized 1st of July, meaning that their company is now in our books, which they were not in H1. We are making the investments in pension as we have talked about, where we have made investments in the experience of the corporate and that we would not invest in more sales capacity before we feel that the offering towards the corporate is good enough. And that's something that we will ramp up during second half. That's just examples of costs.

And could you just give us the impact of Sigmastocks on a full year basis, the cost impact?

I mean the cost impact of the company we bought is not big, but still there is a number that we are making investments in the products now. And we really want to make that a world-class product towards the customers who do not want to make their investment decisions themselves. And we see a big opening in the market, where the competing products are not up to customers' expectations today.

Thank you. There are no further questions at this time. I would now like to turn the conference back to Gustaf Unger to conclude the call.

Thank you much for all the questions. Thank you, Anna, again. And have a great summer to all of you, and bye-bye.