DNB Bank ASA (DNB) Earnings Call Transcript & Summary

Hello, and welcome to the DNB Investor Call. My name is Jess, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand you over to your host, Rune Helland, to begin today's call.

Thank you so much. Good morning, everyone, and welcome to DNB's investor and sell-side call regarding our announcement this morning to launch a cash tender offer for 100% of the shares in Sbanken. Our CFO, Ottar Ertzeid, will give you a brief introduction before we open up for a Q&A. So please, Ottar.

Thank you, Rune. DNB has today announced a voluntary offer for Sbanken. We have entered into a transaction agreement with the company regarding the offer, and Sbanken's Board of Directors has recommended our offer and also obtained a fairness opinion that concludes that our offer is fair. Shareholders representing a total of 29% of the outstanding shares have undertaken to accept our offers, including the company's largest shareholder, Altor, with 25%. Additionally, DNB owned 1% of the shares in the company before the announcement, and we have just sent a stock exchange notice that we now owned more than 5% of the company. The offer is an all-cash offer of NOK 103.85 per share, valuing Sbanken at NOK 11.1 billion. The offer price represents a premium of 30% over the closing price yesterday and 50% over the average volume weighted share price the last 6 months adjusted for dividends. The Chairman of Sbanken has this morning commented that the Board of Directors of Sbanken is of the opinion that the offer reflects the financial and strategic value of Sbanken and implies an attractive valuation for Sbanken shareholders. Furthermore, that he and the Board of Directors believe that Sbanken and DNB, as a combined entity, will be strongly positioned to compete with the global technology leaders. The complete details of the offer, which will be contained in an offer document after approval by the Oslo Stock Exchange, will be -- is expected to be available or approved next week. The acceptance period in the offer will commence following publication of this offer document and will last for '20 business days. Completion of the offer is subject to fulfillment or waiver by DNB of certain conditions, the 2 most important ones being acceptance to such extent that DNB becomes the owner of more than 90%, which we may waive to a level of 2/3. And secondly, obtaining regulatory approval from the Ministry of Finance and the Norwegian Competition Authority. We have earlier today already filed the application to the Minister of Finance through the Norwegian FSA. It is expected that the offer will be completed in the third quarter this year following receipt of regulatory approvals. If we acquire more than 90%, we intend to carry out a compulsory acquisition of the remaining shares and apply to delist Sbanken from the Oslo Stock Exchange. The transaction is sound, in our opinion, both from a financial and an industrial point of view. Our retail banking has, in recent years, become more like Sbanken, serving customers primarily through the mobile bank and the Internet bank. Sbanken is located in Bergen, which is DNB's main hub in addition to Oslo. The combination of Sbanken and DNB will create a strong technology organization in Bergen. Our Chief Executive has commented earlier today that we'll now have an opportunity to combine 2 of Norway's top providers of detailed customer experiences into one large innovative environment. Sbanken is a leading pure digital retail bank in Norway with some 476,000 retail customers. We believe that Sbanken will further strengthen our position within retail banking in our home market. The loan book of Sbanken is entirely towards Norwegian personal customers. DNB's market share within personal customer mortgages in Norway is estimated to increase from approximately 24% to approximately 27%. 95% of Sbanken's NOK 83 billion loan book consists of high-quality residential mortgages with a loan-to-value of approximately 53%. Sbanken's market share for deposits is approximately 3.6% with NOK 59 billion in customer deposits. Sbanken has a market share in retail fund savings in Norway of approximately 8.1% with NOK 23 billion in customer investments in mutual funds. Sbanken also has a position in the consumer finance market with close to NOK 2 billion in outstanding loans and has also launched offerings in the SME segment with 8,000 customers at the end of last year. Sbanken will complement DNB within the savings area, which is a growth area for DNB and will also add highly skilled technology resources. Some financial comments. We have been allowed to carry out a thorough due diligence of Sbanken since March. Being an in-market merger, we expect cost synergies, which allows us to defend the price being offered. We will not be specific today on cost synergy estimates. Areas where we expect cost synergies include information technology, cybersecurity, anti-money laundering and compliance in general. The full effect of the synergies is expected to be realized over the next 3 to 4 years. DNB's size, both in Norway and in Bergen, makes it possible to achieve cost synergies during ordinary course of business and by replacing external IT consultants in DNB. We, thus, welcome all Sbanken staff to DNB. Capitalized Sbanken use standardized risk weight of 35% for residential mortgages. DNB uses internal rating based models for capital requirements. It's currently 21% risk weight for mortgages. Thus, we expect potential to risk double -- risk-weighted asset efficiencies. This is partly offset by a 2 percentage point high capital buffer requirement for DNB being a systemically important institution in Norway. We also expect some funding synergies, mostly with regard to additional Tier 1 capital, Tier 2 capital and senior nonpreferred debt, but these are less important. DNB has a broader product range than Sbanken, and we will naturally also strive to realize revenue synergies. This is an all-cash transaction and is thus expected to positively impact DNB's earnings per share and return on equity. So with those introductory remark, Rune, I think we can open for Q&A?

Yes. Thank you, Ottar. Please?

[Operator Instructions] The first question comes from the line of Adrian Cighi from Credit Suisse.

Adrian Cighi from Credit Suisse. Just to follow-up on the synergies point you're making. You do not obviously provide any synergies for the proposed transactions, either on the cost or the revenue side. But just using sort of consensus estimate, you'd need to realize some NOK 400 million in synergies by '23 to get a 12% ROI. First off, is this the right hurdle amount that you're looking at in terms of ROI? And can you give me -- give us any sort of sense of how you look at the combined synergies and asset that you can maybe extract from this deal? And then maybe secondly, please. This transaction, as you noted, would take your mortgage market share to 27%. Have you had any input from the Competition Authority prior to today? Or do you expect that process to just start right now?

With regard to cost synergies, I made some remarks earlier on referring to what you typically see in market transactions. So I think it should be possible to make some rough estimates. But at this point in time, we are not elaborating on that, although I'm pointing to areas, as I mentioned. But -- so we will -- we can come back to that at a later stage. With regard to the Competition Authority, we have of course, made our own assessment and our own legal assessment before entering into this offer. And we have today initiated a contact with the Competition Authority in Norway. Of course, we -- in our opinion, there is no reason why this should not go through, but of course, we respect that it will be considered by the Norwegian Competition Authority. That could take from 25 to 100 business days to do.

The next question comes from the line of Sofie Peterzens from JPMorgan.

Yes. Here is Sofie from JPMorgan. I was wondering if there are any one-off related costs to this transaction that we should be aware of? And when these one-offs potentially are going to be booked? And then my second question would be on [ net ] Sbanken, it's a little bit a timing question. Why are you bidding for it now? Why not earlier or later? Were there are other bids from potentially other banks of Sbanken? And if you could potentially talk a little bit about that. And then my third and last question would be, how should we think about M&A for DNB going forward? Should we -- how do you view -- is M&A now a bigger priority than returning capital to shareholders? Or kind of how should we think about future M&A?

With regard to one-offs as restructuring costs, the integration will take place in 2 phases. We have today applied for approval to own Sbanken, and we will shortly apply for a -- to be allowed to merge with Sbanken. That -- the last application will take a bit longer time, so we do it in 2 phases. When we actually integrate it, of course, there might be some restructuring costs that remains to be determined in the same way as the cost synergies. But of course, we have taken a -- we have done a thorough due diligence, as I mentioned, and has taken this into consideration when putting forward the offer today. So, again, you have to come back to the history of the size of the restructuring cost. But as I mentioned, we have a platform, both in Bergen and DNB as a total, allowing us to do this in a smooth way going forward over a period of 3 to 4 years. With regard to timing, of course, there is a -- there are -- which is a good point. Last year, we had the removal of the Basel floor in Norway, meaning that the difference in the risk weights between banks on a standardized risk models and IRB banks like ourselves became a bit bigger than previously. Our own capital situation is very comfortable, as I comment upon when we presented our fourth quarter results in February. We are pointed to the fact that the headroom at that point in time, even with the dividends for 2019 and the proposed dividend for 2020 was a higher headroom than we would normally work with over time. So the offer we are making today is in that respect, consistent with our earlier communication. And of course, it's also important for us that we take a positive view, both in regard to the savings market in Norway and the growth we see in the savings market in -- where Sbanken has an interesting position as well as the expected interest rate path from the Central Bank in Norway going forward and Sbanken has 90% floating rate mortgages on their balance sheet. So we believe this is an interesting time for both banks to enter into this transaction. DNB, for the reasons I mentioned, Sbanken because of the fact that they can then have a loan book on a bank with an IRB license from the Norwegian FSA. With regard to our dividend policy, et cetera, that -- I can definitely confirm that, that stands. We are fully committed to our dividend policy, including the ambition of increasing nominal dividend per share every year. We have talked about that we might consider smaller bolt-on acquisitions within strategy as an alternative to share buybacks. And it's our opinion that we have a sufficient capital situation to fully deliver on the dividend policy, sustain and support the organic growth of our present business and also being able to exercise this opportunity.

Okay. That's clear. But -- or actually, just maybe a follow-up. So just in terms of the dividend, it sounds like you're definitely standing by your dividend policy, but on the share buyback this could be shifted a little bit more toward acquisitions. Was that a correct read?

We have been very clear, I think, the priority to deliver on the cash dividend part of the dividend policy and to follow the -- and to grow with the targeted growth rate we have talked about and having the share buybacks more as a flexibility is to be surplus capital beyond that. Of course, the practical consequence of an M&A transaction like today is less potential for share buybacks. That's correct.

Okay. And maybe just -- sorry, one final follow-up. Were there any other bidders for Sbanken? Or were you in exclusive talks throughout the process with Sbanken?

I think that's a further question which need to be -- to address to Sbanken. But they have, as they say today, recommended this offer and also the main shareholder of Sbanken has also recommended this offer. So there is some reading into those facts, of course.

The next question comes from the line of Christoffer Adams from Kepler Cheuvreux.

Under what conditions can the 29%, which have accepted, pull their acceptance? Could they, for example, do so if there's a counteroffer? And secondly, will you be keeping the Sbanken brand name?

If the Board of Directors of Sbanken receives an offer, which they believe is superior to our offer, they must notify us about that. And in which case, we have the right to match that offer. If we decide not to match that offer, then they can recommend another offer. And the same applies for those who have pre-accepted. As I mentioned, we are also -- already become the owner of more than 5% of the shares.

Okay. And...

Yes. The Norwegian financial regulations does not allow a Norwegian bank to own another bank. So we actually have applied for a temporary approval to own Sbanken and then expect to be required to merge Sbanken into DNB Bank within a defined time horizon. If -- and the Norwegian financial regulation does not allow a bank to operate under more than 1 name. So the name of DNB Bank clearly has to be communicated to customers.

Okay. But you wouldn't be able to run it kind of as a low-cost provider the way Sparebanken Vest has Bulder Bank, for example?

That is not our intention. We follow a different strategy and -- with a one-brand strategy. And our intention is to continue to do so. And again, there is also a, to my knowledge, also a regulatory process with regard to those brand names you refer to.

The next question comes from the line of Riccardo Rovere from Mediobanca.

Yes. I just wanted to get back 1 second these questions made by Sofie 5 minutes ago. If I understand well, clearly, these transactions erodes -- well, consumes 100 basis point of capital. So by definition, your surplus capital gets lower on the back of this transaction. But this lower amount of capital will be, how can I say, kind of deducted from the buyback eventually, not from the cash dividend. So the cash dividend remains the main way to return capital to shareholders. Do I get it right?

You are correct that we -- the estimated effect on DNB's common equity Tier 1 level is approximately 100 basis points, which is still well above the regulatory requirement. In the short and medium term, yes, you can say we are well capitalized to continue to deliver on the dividend policy as I stated. And longer term, the increased income from the acquisition of Sbanken will actually strengthen our position to pay dividends going forward. Yes. But again, it means that the capital adequacy will be 100 basis points lower, but it will stay, as stated, sufficient for growth and cash dividends, but it use less room then for using the same capital for other purposes like share buybacks.

Okay. So the priority will remain cash? Cash remains the priority?

We have -- I think, all the way that delivering on the cash dividends of more than 50% of profits in cash dividends and an additional increasing nominal dividend per share every year is the most important one. And bearing that in mind, this will increase net profit over time. And should also thus form the basis for delivering on the cash dividend also going forward, including -- and even better positioned for delivering also the increase in nominal dividend per share every year.

The next question comes from the line of [ Bill Stretton ] from Seaport.

I do apologize. All my questions have been answered, so please remove me from the queue.

The next question comes from the line of Hans Christiansen from Danske Bank.

Just a follow-up on the share buyback and M&A trade-off that Sofie and Riccardo has already asked about. I was just wondering how we should think about the 100 bps CET1 capital consumption? And with regards to this, if you could just remind us what you've said about your management buffer above the capital requirement of future countercyclical buffer requirements previously, and if anything has changed with regards to this transaction.

Nothing has changed. The capital expectation -- the capital requirement currently, with regard to common equity Tier 1, is 15% with expected Pillar 2 guidance above that of 1 percentage point, giving a capital expectation of 16% presently. Long term, we expect that the countercyclical buffer requirement in Norway will revert to the pre-COVID maximum level, which will imply a capital expectation of 17.1%. Our actual capital level at the year-end was about [ 18.6%, 18.7% ]. And it's important to bear in mind the strong capital generation we have every quarter on top of that. So in our view, this gives still a comfortable headroom to the regulatory capital requirements and capital expectations. Also, taking into account the full countercyclical buffer requirement, which we'll probably have at the earliest in 2023.

Okay. And then just perhaps a bit of a specific question, but do you anticipate that there's any kind of customer overlap between the 2 because of this in-market transaction? And then the other question is how many external IT consultants do you currently have in DNB?

There will probably be some overlap in customer -- in the customer base regarding distinctive product use. We haven't quantified that, but we have some rough estimates internally following the due diligence process. With regard to technology consultants, we have a strategic partnership with TCS, and is an extensive buyer of IT consultants. At the same time, we have communicated an ambition to replace those with building up more technology staff internally in the bank, sitting very closely together with the business, and we believe this transaction gives us a very good opportunity of actually accelerating that program and that intention we already had. So our view of this is really a good match for both organizations.

The next question comes from the line of Jacob Kruse from Autonomous.

Jacob from Autonomous. Just two questions. Firstly, the IRB transition on the acquired assets. Can you do that immediately? Or do you need to get an approval specifically for the assets you acquire? Or can you just sort of shift them on to your currently approved books? And secondly, this transaction, should we view that as a bit of a shift in your strategy? So could you just talk a bit about how you view acquisitions going forward and perhaps in particular, in -- outside of Norway with respect to the Nordic countries or in Europe?

With regard to the timing of the RWA efficiencies from using the internal rating based models, we need to have the merger before we are allowed to do so. So that's why we will progress as fast as we can also with the merger. But realistically speaking, I can estimate it will take 1 to 2 years to get that book on DNB's IRB models, at least that is our best estimate, but -- and it is an estimate. I can assure that there is no change in DNB strategy. We have been doing smaller bolt-ons in market transactions historically. Last year, we bought smaller pension firm in Norway and also the third largest ERP provider in Norway. So we have been doing and might also in the future, consider small bolt-on acquisitions in -- clearly within strategy if we believe such transactions will be value creating for our shareholders, which, in this case I definitely believe. No change with regard to our strategy, and there's no change in how we view on other kind of international M&A deals.

Our next question comes from the line of Sindre Sørbye from Arctic Asset Management.

Yes. It looks like a good deal financially, but on the brand level, you said it was not the intention to run it like Bulder Bank concept, more like a one-brand strategy. I mean given that Sbanken has a special history and also that they have the highest customer satisfaction in -- among Norwegian banks for a number of years, is there a risk to -- from a marketing perspective, to integrate all those customers into -- under the DNB brand? And prolonging that argument isn't a risk that you need to, let's say, offer very competitive mortgage rates to, let's say, to keep them in there. So if you can give some thoughts about that. And secondly, also on the savings area. Will it close on the Sbanken platform and integrate into that -- into DNB's, well, highly successful platform.

I think with regard to strategy and the business proposals, I think 20 years ago, when Sbanken started, they were quite -- obviously quite different from traditional banks, being a pure digital bank. But over the last years, I think we have become much more similar. We also serve our customers now in the region primarily through the mobile bank and the Internet bank. So in that respect, they have become much more similar. With regard to pricing, Sbanken last year was quite clear that they have more changed or gradually adapted their pricing policy with regard to stop chasing the price changes. So in our opinion, our strategies have been much more aligned. And that should reduce the risk you are pointing to. But of course, we are very aware of the facts you are pointing to and we'll obviously address that going forward. But I think it's too early to comment on those aspects. We are now in a phase where we have put forward an offer. And after having received the regulatory approvals, we will be allowed to sit down together with the excellent team in Sbanken to find out how to make these 2 banks an even better bank for the customers going forward by combining the resources and expertise of the both banks.

And in the savings area, what are your plans there?

It's, again, we will have to do the same. We are -- I think Sbanken has an interesting position and has a good track record in that area, which we believe is an interesting area in Norway going forward. So again, we will sit down and find how to ensure that the combined bank will be the -- definitely the bank with the best customer offerings in Norway with regard to digital customer experiences, et cetera, going forward. But again, that remains to be discussed after the close of the transaction when we are allowed to sit down to discuss such items.

Okay. If I may have a brief follow-up. Are there any clauses in the, let's say, deal with Sbanken that keeps any key management there?

At this point in time, I cannot comment on that. But there are obligations or strings, that would be something that Sbanken will have to disclose in the Board statement from Sbanken.

Next question comes from the line of Jan Erik from ABG.

Yes. Some -- just additional questions from my side. On the competition side, have you also considered deposits as well as mortgages and savings when it comes to the competition? And also the sort of the latest SME offering, how do you think the Competition Authority review these 4 sort of key markets? What's the differentiation? How much big market share that you actually get in those 4 markets? If you can shed some light to that.

We believe that there is no reason to conclude that the competitive landscape in Norway will change through these transactions, and that there should be no reason why this transaction should not go through as far as our competitive -- or our experts on capacity law is evaluating the situation. And historically, in the early years of the 20th century, 21st century, we had an even higher market share in deposits. So again, we believe this is not a competition [ of various risks ]. Still strong competition in the Norwegian market with a significant number of banks, [ and all functioning ] market.

And the second question goes to the mortgage margin pressure. You have seen sort of a market share go from below 40% to currently 24% over 18 years. What could hinder you now from sort of get back to 27% and lose every year, [ after 1 ] percentage point again going forward because you have higher prices than your peers?

We focus on profitable growth and profitability and believe that we have a competitive offering to our customers. And definitely expect to continue to have that also going forward. We do not target a specific market percentage as such. But I've communicated an expectation that we believe we should be able to grow with an annual loan growth of 3% to 4% going forward, which we believe is sustainable and a level for DNB, which should provide interesting opportunities, profitability-wise for our shareholders.

Finally, then on the IT system, which kind of IT system would you continue with here? Would you sort of scrap the Sbanken system? Or is that really what you would go forward with and add to your sort of current DNB system and scrap your own ones? So how should we rethink the SME plans, the mortgage offering and as well the savings offering, as the [indiscernible].

These are topics which will be evaluated and considered with a key employee from both banks after the regulatory approvals have been obtained. So this is too early to speculate on that. But, of course, in today's world, there is high fixed costs with regard to technology and compliance, for example, which is the reason why we say that we expect cost synergies following these transactions, but we have not concluded on -- with regard to the selection of technology systems, for example.

The next question comes from the line of Martin Leitgeb from Goldman Sachs.

I have 3 questions. Should I just keep them all in one go? Or do you prefer doing them one by one?

It's your choice.

Okay. Let's do the one in one go then. Firstly, just a clarification on capital. So the circa 100 basis point impact on capital, is that net of essentially rolling DNB's side of the approach onto mortgages at Sbanken so that, that benefit arising from moving from [indiscernible] is already included in that 100 basis points? Or other way around, is the capital impact slightly less than 100 basis points, if one were to consider that? The second question, just again on the rationale of this transaction, just looking at, obviously, the capital impact and if we just look at the pro forma financials for Sbanken, I mean what could argue if you would have returned the capital to shareholders, EPS and return on equity would have increased at DNB. So I'm just trying to gauge what is the main attraction of that deal? Is that on the revenue side? Is that on the cost side? Or a combination? And with respect to revenues, it seems that this deal would bolster, in particular, net interest income as opposed to fee income, and my sense from the Capital Markets Day 2019 was that it was a focus at DNB, in particular, growing capital-light fee income as that transaction helped you in Africa, so growing capital-light fee income? And final question, the third one, just in terms of funding. I was wondering -- I mean I appreciate the comments on the capital earlier. Is there any obvious funding synergies arising from the deal in a way that DNB could fund potentially much cheaper in certain areas as compared to Sbanken?

Thanks for the questions. With regard to capital, we say approximately 1 basis point effect from -- on common equity Tier 1 with some positive effects over time with Sbanken being included on DNB internal rating based models some time, in around 1 to 2 years from now. But in calculations, you should assume around 100 basis points effect on capital. With regard to strategic rationale and industrial rationale, I think it's worth -- starting with what I'd mentioned about fee revenue, for example. Sbanken has a high market share for deposits than loans, which we -- and deposits, we believe, is attractive in an environment where the Central Bank has forecasted that it will start to hike interest rates from later this year and continuing to '22, '23, '24, will be close to 150 basis points in increased policy rate from the Central Bank. On top of that, Sbanken has a much stronger high market share in savings, in mutual funds than in balance sheet products. So we strongly believe that this is an opportunity to grow fee and commission income and the savings area at a higher rate. So this is fully in line with our guiding that we expect a higher growth in net commission and fees than with regard to loan growth. And that also partly illustrates some of the strategic rationale for this transaction, both with regard to the savings area. Of course, the point in time we are actually entering into this transaction with regard to the interest rate environment we expect going forward in Norway, with the current situation in Norway with the different situation of the IRB banks versus the standard mobile banks. So -- and on top of that, we have communicated that we would like to build even more technology into our business areas. And this is also an opportunity for us to have a highly scaled technology staff becoming part of DNB, helping us to ensure that our customers also going forward will have the best customer digital experiences, which we believe is the way we should serve customers going forward, and as -- which the covered period has definitely confirmed is a sensible strategy.

And on the funding side? I'm sorry. Is there any obvious strategy...

Yes. Sorry, I briefly touched upon that already. We do not expect material funding synergies as Sbanken also have a covered bond subsidiary. It's in covered bonds and the prior difference for covered bonds are negligible. But with regard to additional Tier 1 capital, Tier 2 capital and also the new requirement for MREL debt or senior non-preferred debt, we expect that our better credit rating will give some funding synergies on these capital instruments.

The next question comes from the line of [ Hadia Guergouri ] from Allianz Global Investor.

Sorry, can you hear me?

Barely. Sorry, we can't hear you.

As we are having technical difficulties with [ Hadia's ] line, we'll go to next question. Your next question comes from the line of Harry Siva from KBW.

I just wanted to come back to the tech aspect of the deal and how significant that was in your thinking. There's been some discussion of platform, staff and I think I heard cybersecurity earlier on. And then how do you weigh out acquiring technology compared to developing it internally?

My reflection on cybersecurity was more a comment that this involves a big fixed cost for a digital bank these days. And that in that -- in the area of cybersecurity, there is obviously a significant cost synergies. So this was an example of a cost synergy area going forward. We believe technology has become more important, and that's why we have reorganized the bank, putting more technology into the business area and also stated that we would like to increase the -- replace the consultants by technology staff in the bank going forward. So this is just an example of one of the attractions we see with Sbanken, working together with the resources of DNB. And the two banks together, having the opportunity to deliver even better solutions.

The next question comes from the line of Christoffer Adams from Kepler Cheuvreux.

I want to go back to the question of antitrust approval again. With the 24% market share, DNB is by far the largest retail bank in Norway. And with this acquisition potentially going through, that will increase to 27%. Now Sbanken has historically been one of the most important challenger bank in Norway. So it's not inconceivable that the antitrust authorities will have a problem with this transaction. What are you telling antitrust authorities to alleviate any concerns that they may have?

That, of course, is something we will come back to with the Norwegian Competition Authority. But we believe that the strategy of these banks have been quite similar over recent years. The challenger position was definitely a clear one if you go back 10 or more years in time. As I mentioned, both the strategy and the pricing strategy and the business, in general, has become much more similar over the last few years. And the combined market share should still be below the threshold the Competition Authority use as benchmarks in competitive assessments.

The next question comes from the line of Vegard Toverud from Pareto.

I have 3. What kind of churn assessments have you made for the customer base of Sbanken in your calculations? That's number one. Number two, in the due diligence, have you found any difference or significant difference in pricing of customers? And number three, I understand that you will go through the IT systems later. But if we look at the customer front, will the Sbanken customer maintain their customer fronts? Or will they change to DNB fronts? And will the DNB fronts potentially be adjusted to some of the structures of the current Sbanken in customer fronts?

With regard to churn, we have obviously made assessments of that and also risk mitigating actions to address that potential. But -- and of course, we are also taking that possibility into account when considering the offer price in the transaction, and we believe this is a financially valuated transaction for DNB shareholders, also with consultative assessments. With regard to the choices on technology and what technology we will have to our customers in the future, that is too early to be comment upon. We are still in a phase where we actually launched an offer. That offer has to be considered. We need to go through the regulatory approval and then have the regulatory approval. We will sit down with Sbanken to evaluate that issue. But through the due diligence process, we are, of course, aware of what technology and systems they are using today and have taken that into consideration when launching the offer.

Is it possible to say some more about your churn assessment? Have you assumed the same as you would assume for the market as a whole? Or is it possible to give us some more information about that?

No. We cannot comment upon anything more than that. Just I can refer to the positive statements made by the Board of Directors of Sbanken and how they consider this attractive, and the 2 banks' joint ambitions for what we are going to deliver to our customers going forward.

There are currently no questions in the queue. [Operator Instructions] We have no further questions in the queue. So I'll hand the call back to your host for any closing remarks.

All right. Thank you all for your participation, and we hope you have a nice day going forward. Thank you very much.