DNB Bank ASA ($DNB)

Good day, and welcome to today's DNB Q1 Conference Call. This call is being recorded. And now I will hand the call over to Rune Helland. Please go ahead, sir.

Thank you very much, and hello, everyone, and welcome to DNB's analyst call for the first quarter. To answer your questions here in Oslo, we are the CEO, Kjerstin Braathen; CFO, Rasmus Aage Figenschou; Head of Personal Customers, Maria Ervik Loevold; Corporate Norway, Marian; and MCI, Harald Serck-Hanssen; and of course, DNB Carnegie, Alex Opstad, in addition to Head of Risk, Eline Skramstad. Before we take your questions, Kjerstin will give you the highlights for the quarter. Kerstin?

Yes. Good afternoon, and thank you for spending the time with us. Just some brief comments that we have repeated during the day and for this release of our first quarter numbers that we believe to be a robust set of results to start the year that has been a rather turbulent start to the year with the conflict in the Middle East. A few points on the Norwegian macro, which continues to show resilience, and we see further proof points that Norwegian households are robust. We see the GDP estimates for this year and next year ticking slightly downwards, but we're still talking about healthy growth levels in the area of 1.4% this year for the Mainland economy and 0.9% for next year. We continue to see unemployment remaining at a low level with 2.1%, and it is expected to remain so. And the expectations for this year's wage settlement process is that we will see a real wage growth for households, and this supports the expectations that consumption will continue to be a driver for economic growth. And inflation that has been somewhat more resilient to come down than expected and also last year's wage growth has led to, in combination with a more unstable environment, a turn in the outlook from the Central Bank and the turn that has been adopted by the market as well as the macro economists in DNB Carnegie. And this is related to the interest rate outlook for the key policy rates that is now expected to be increased on 2 occasions this year, each of 25 basis points, taking the key policy rate to a level of 4.5% rather than the expectations of a further cut that was the situation the last quarter when we had our call. We believe the economy is robust in dealing with that and the resilience in the economy will continue to be demonstrated. And the outlook is still what we consider to be a benign outlook for our business despite the uncertainties being higher than normal. For the quarter as such, return on equity comes in at 14%, supported by growth and I think a strong performance across the customer segments. We continue to deliver growth on the lending side, nominally less visible this quarter because large corporate is the entity that grows the most with 2.3% growth, which is offset by a stronger Norwegian kroner this quarter. On the deposit side, we see very healthy growth in Corporate Customers Norway as well as on mortgages. And I think overall, the signal going forward is that we are confident that we will be able to deliver on our growth platform and the 3% to 4% we aim for a profitable growth within a year. The growth impact and its impact to NII is, however, offset by narrower spreads stemming from repricing as well as a fewer number of interest days. We also have an impact from asset mix and NII is down 5.4% from the fourth quarter. Commission and fees up 18% compared to the corresponding quarter last year, in which Carnegie was only accounted for by 1 out of 3 months. We still believe this is a robust result with a very high activity in January and February, somewhat muted by the conflict in Iran and the postponement, I would say, of some of our customers' projects, but also in commission and fees, a very, very strong quarter for Wealth Management with a record inflow of new assets of NOK 20 billion in the quarter as such. Important to note also that the portfolio remains very robust. There is no negative migration, no systematic deterioration in any area of the portfolio. The impairments that we booked of NOK 644 million in the quarter is mainly related to customer-specific events in Corporate Customers Norway, and there are no other systematic developments of concern that we feel need to point out to you. Lastly, capital position, very robust, 18.1%, also supported by 20% from the dividend that was upstreamed from That was the annual result. There was also a capital release in the fourth quarter. So we continue to demonstrate how that business is supporting our capital position. Earnings per share NOK 6.5, ample position to support our customers with further capital pay out on -- in accordance with the dividend policy. And the last comment I would like to make is our general assembly that was held on Tuesday, where the Board was given, again, a power to buy back up to 3.5% of our shares during the course of the year, and we have already sent an application to the FSA to initiate that, and we'll revert back to you once we have that response. And with that, I think we will open up for questions.

[Operator Instructions] Question is from [indiscernible] from Morgan Stanley.

So my first question is on lending spreads. We see that they declined meaningfully quarter-on-quarter. Could you break down the drivers of this compression specifically? How much was attributable to lower interest rates versus potentially competitive pressure? And do you expect any further compression from here? Or do you think we reach the trough? And looking ahead, where do you expect the spreads to stabilize under 2 scenarios, one in which rate hikes resume and another in which rates remain unchanged?

Thank you so much for your questions. In order to consider the spread development, we usually say that it's important to look at the volume-weighted spread because when you look at individually the lending spread or the deposit spread, you will see the movements of the money market rates. And in particular, this quarter, you will see a weakening related to the growth in money market rates throughout the quarter, but then that also finds its opposite in the development on the deposits. So I think what we can give you in terms of meaningful guidance to understand the development on spreads that are in total NOK 449 million for the quarter is that roughly 1/3 of this is related to the last part of the impact from the repricing that we did that started to take effect in November last year. There is quite some impact also from changes in product mix effects. I will describe in further detail. And there is also slightly less than 1/3 that stems from competitive pressure across the segment, but particularly what we're talking about is personal customers and corporate customers in Norway. Now product mix effects, what is that? One part of it is a change in the regulation for how companies pay their amount due for taxes throughout the year. There has been a regulation where they have been building up an amount in accounts. This has been low-margin accounts, very attractive for us. And they used to pay that on 4 occasions throughout the year. Now this is paid directly. So no deposits are accumulated in our accounts. And we have talked about this. This will have a negative impact on our NII for the year of NOK 300 million. Another effect that we see on the large corporate side is that we see a repayment of loans that have higher margins than the average margins in the area. And we see that the growth coming on to our books, the new volumes coming in are low risk and lower margin volumes. There is also an element of that in corporate customers Norway. Beyond that, we continue to see that customers are rational in their deposits, typically moving deposits when they can from lower-margin accounts to higher margin accounts. Now as for your question, where do we expect them to go if rates go up or down, I think it's very challenging for us to give you any specific guidance on in view of the fact that our margins develop with our potential decisions to change prices if and when the policy rates move, and we are not in a position to comment on our possible future action on pricing. I think what we can say is that we continue very systematically and disciplined, I would say, to prioritize profitable and sustainable growth, which is probably a reason for seeing a slower growth in parts of the business than others this quarter. But we are very pleased to see that a large number of customers are interested in using our products and services for their needs, and we are able to grow across the business while also keeping a priority on profitability. And that is also our message for the remainder of the year. We are indicating 3% to 4% growth. We are not specifically splitting that up from one segment to the other, but 3% to 4% profitable growth is what we believe we will be able to deliver across the platform of the various customer segments. So I hope that was a little bit helpful.

And can I also stick into the revenues? Investment Banking asset management performance was softer this quarter. Could you provide an update on how your investment banking pipeline is shaping up across the different product lines? What trends are you currently seeing? And how would you characterize the key drivers of the fee income growth going forward? And have you observed any meaningful shifts in the sentiment towards the end of Q1 and into the start of Q2?

Thank you. I will make a few comments on Asset Management, and then I'll ask Alex to comment on Investment Banking. You can see from one of our slides that the revenue on a 12-month rolling basis continues to grow for both of these areas. I think for Asset Management, obviously, markets have been more volatile and come down. So it's a mere a consequence of the fact that market valuations are down in the year that you see a reduction in assets under management as a whole. But on the contrary, we have a decent growth on the fee side, and we see record volumes coming on to our books through the net inflow, which is more than NOK 20 billion in the quarter. And this is a record level of net inflow for our business. We have also talked about that this record remains also if we look at the previous 12-month rolling period where the net inflow is NOK 65 billion. So it seems to be a lasting trend. And I think it is also a result that we have been working systematically with this across all of the DNB activities where we have a lot of different positions to work on in relation to activities related to savings and investments. As for the margins in Asset Management, they're stable in the quarter. We do, however, comment that over time, there is a trend towards index-related products, but we have also seen other regulatory changes related to pension and account structures, but we've, along the past few years, been able to more than absorb these by new business coming on to our books and by a relatively attractive growth on the retail side, which is a higher-margin business. And the retail volumes also represents more than NOK 5 billion of the inflows this quarter, which we think is a pretty strong number. Alex, Investment Banking?

Thanks, Kjerstin. So of course, softer quarter-over-quarter, but that's more of a seasonal effect. If we look at the year-over-year effects, our business is growing and the bright spot in Q1 on the investment banking side is M&A. The capital markets revenue lines were softer. If you look at the Nordic markets, for instance, on the Nordic high-yield side, issued volume in Q1 '26 versus last year was down about 35% and that we have to put on to the market volatility in March. So it was a good start to the year in January and February and then projects got postponed, particularly within DCM and ECM in March for obvious reasons. I'd say the pipeline is strong and intact. And of course, sector-wise, there's been increased activity within oil and gas and energy, which on a relative basis is sort of to our favor. And in some other sectors, we see more of a cautious approach.

Our next question is from Sofie Caroline Peterzens from Goldman Sachs.

It's Sofie from Goldman Sachs. So just going back to the previous question on competition in Norway. All the banks are saying there is a lot of competition in Norway. You also had it in your report earlier today. But could you kind of just discuss the competition a little bit? Is it only on the pricing side? Or are you also seeing it in terms of kind of terms and covenants that these are being loosened? And what's the outlook? What could kind of trigger that competition eases? Do you think if rates go up, that should reduce some of the competition? Or how should we think about it? And do you also see a lot of competition on the deposit side? And then my second question would be on the fee side. I know fees were up 18% year-on-year. But when we look at the kind of expectations that the market or consensus estimates are doing embed kind of 9% fee growth going forward. How confident do you feel that you can deliver over 9% fee growth kind of underlying over the next 2 years?

Thank you, Sofie. Good questions on the competitive dynamics. I would say that we see it, I think, primarily on the mortgage side, it is price related. Typically, the other alternatives are related to customer offering and other type services that customers value in addition to price for why they choose as they do and not so much structure. Moving into the corporate customers in Norway, I would say that we do see an impact both on the pricing and on structures. And part of the reason why our volume development is not as strong in Corporate Customers Norway this quarter is that we have said no to a larger number of transactions than we usually do. All the same, we are overall pleased to see the total volume that we are able to put our on books while protecting both profitability and and risk in accordance with our standards. What could reduce competition? It's always hard to be that specific overall, but I think nothing has changed in terms of the messaging of Norway being a rational market. What makes it a rational market is that all players active in the Norwegian market are focused on profitability and return on equity. And we have noted, as I'm sure you have, that some of the messaging is changing from certain of the players in the market. One could speculate that, that means that the focus on profitability is starting to become a bigger part of the conversation. I can only answer on our behalf that we keep that employment of capital disciplined and keep our focus on profitability. Are we seeing it on the deposit side? I would say yes, but deposits are typically less what you call it, they're more sticky than loans, apart from in the large corporate sector, where we are typically more opportunistic, coordinate very closely with treasury and take on the deposits that makes sense for us at the pricing that makes sense. But this is the main reason why we have seen some deposit outflow in the large corporate sector, but we also see that we are an attractive counterpart. On the fee side, we maintain our ambition of 9% -- we continue to see the integration of DNB Carnegie progress as expected. We continue to reap the benefits, I would say, from a stronger and more competitive offering towards customers. But as we've also seen in the month of March, this quarter, we are not insulated for -- from what goes on in the market. So we will be impacted by that. And if that should turn out to be more turbulent than expected, I think it always has to be the relative performance that is evaluated in relation to this area. But we see no reason to change the communicated ambition on the fee side.

Our next question is from Namita Samtani from Barclays.

My first one, how do you think about capital allocation between the retail division and the corporate divisions, both Norway and large corporates now given the fierce competition in retail? Do you want to allocate more capital to corporate now? And secondly, just on market share on the retail loans and deposits. In many quarters, the fact book shows since the 31st of March '24, there's been a loss in market share. Do you think that's inevitable given the size of the bank you are? Or what can be done to improve the franchise that there isn't market share slippage?

Thank you, Namita. Capital allocation, I would say that we have been pretty consistent. We will prioritize allocating capital to the personal customer area and the lower part of the corporate customers Norway as long as we can do profitable business. But we are not sort of -- we have a dynamic approach towards capital allocation. We do not allocate in the start of the year a specific amount of capital to the 3 areas, and then we stick to that. We are keeping this dialogue ongoing in group management. But given the nature of the business, we will not put limitations on personal customers nor the lower part of corporate customers in Norway, the SMEs, if they can grow profitably. And beyond that, large corporates, the limit is really related to profitability. And if they have even more opportunity to grow, they will have to use the various tools to increase the turnover of capital, which is why we have focused so systematically on originate to distribute and increase the turnover of capital, which is beneficial for the return. This is a tool that is particularly available in that sector. But naturally, when we see less capital being employed as we have seen this quarter in mortgages and in Corporate Customers Norway, there is a further room for large corporates to grow. As for your question related to market share, it's important for us to show the ability to grow. It's important for us to maintain a very clear #1 position in the SME area, in the personal customer area. Both of these are fulfilled, if you will, also throughout the period where we are giving away some market share, but these are the 2 criteria that we are focused on.

Our next question is from Riccardo Rovere from Mediobanca.

The first one is on NII. Rasmus here I'm quoting you what you stated this morning during the press conference. As in every -- almost in every first quarter, activity is lower. This naturally impacts net interest margin, which was down by 7 basis points. The reduction reflects narrowed combined spreads and other NII not included in the customer segment. Now if I look at your fact book, which is -- and here I'm referring to Table 1, 02 01, I don't know if you have it in front of you. And I look at the other net interest income, I noticed that over the past 3 years, systematically other net interest income in Q1 by roughly NOK 50 million. It was NOK 50 million in Q1 '24. It was NOK 540 million in Q1 '25 and now seems to be almost NOK 700 million, of which maybe NOK 170 million was a one-off in Q4. Now 3 years in a row, maybe a coincidence or maybe there are technical factors that basically imposed, may say so, the NII going down in Q1. And then in 2024 and in 2025, that was recovered the following quarter. Now can you please explain if there are technical technical factors that force other NII down in every single first quarter, please?

Very good. I will try to answer that as a very, very precise question. So I will try to answer it as precisely back. There are certain factors that are repeating, but they will play themselves out a little bit differently depending on the interest regime. One example being in the other NII would be the gradual buildup of interest, say, owed to our retail customers building up through the year. being then deposited into the customer accounts in Q4, leading to a -- and having then benefited the bank within other NII gradually and then seeing out at the start of the year. So that's a gradual buildup through the year being deposited into the customers' accounts and then starting over again the next year. So that would be one such example of a cyclical repeating nature. One that is hitting us this year, but that is not repeating nature, but other effects in other years will be, for example, on the tax account for SMEs. That's due to regulatory change, where in the past, they've had a gradual buildup on their accounts and paid it to the government in, I guess, once every quarter as far as I remember. And now it's a much more frequent repayment to the government, thus reducing the holding period within the bank. That has about a yearly effect of NOK 300 million. So there are some -- in other NII or that effect in terms of not hitting directly within the business areas. It's also treasury and risk management, which would be this year, for example, on the changes in the liquidity management portfolio. which has partly the effect on the other NII in the average. So even though it's not as -- even though there are not repeating patterns every year, some are repeating and others are more either happening like the tax account happening once -- yes, and then probably other things than in the past of similar nature.

But there are basically factors that naturally push NII down in Q1 that has nothing to do with what you do from a commercial standpoint.

Yes. Well, the delta from Q4 to Q1 pushed it down. That's correct.

It has not been -- it seems to have been a pattern, Riccardo, but I don't think that we can consistently say that you should expect this on every occasion. There was a couple of years that -- where this pattern changed in the aftermath of COVID, but you are right in saying that more years than others, that tends to be the direction.

Well, the new disclosure is in place since Q4 let's say, by quarter numbers since Q3, Q4 '23 and every single year in Q1. I mean, 3 years in a row. I don't know if that is a coincidence, but 3 years in a row. Maybe it's not a coincidence.

We have disclosures many more years back than that, if you look at our...

No, not the new one, the new one. Anyway, I understand. The other question I have is on -- you reiterated the 3% to 4% loan growth. Q1 numbers seem to be a bit lagging behind, if I may say so. So I would imagine your reiteration of the 3% to 4% loan growth means that you are expecting let's say, improvement throughout the rest of 2026. And I was wondering whether eventually higher policy rates could put the 3% to 4% at risk in case.

Of course, I mean, given the fact that we have a currency adjusted growth for the group of 0.3% in the first quarter, an indication that we believe we can reach 3% to 4% necessarily means that we need to see a higher growth rate in the coming quarters. And typically, we see that with the second and the fourth quarter being the higher growing quarters seasonality-wise in the year. We do expect this across our activity. I wouldn't say that we expect potential rate increases from the Central Bank to jeopardize this. Again, we reiterate the growth platform that we have been talking about where we both have our Norwegian activity as well as our activity now increasingly in Sweden, but also outside of Norway in industries and sectors where there are increasing investment and our messaging is consistent in saying that across all of this platform, we believe that we can deliver growth also at times where -- when and if there is a slower growth in mortgages and SMEs in Norway. We did say this morning that activity in the housing market was a bit subdued and possibly in view of the messaging on rates. But I mean, it's not a very big change. We also pointed to the very strong results, we believe, in our brokerage property brokerage activity where our results were higher than they were the same quarter last year. And of course, a continued growth in house prices, a nominal wage settlement that is expected to be in the area of 4.5% and inflation are also positive drivers for growth in our business. And I think the performance given the market in the mortgage area was pretty strong in the first quarter. And typically, second quarter is better and expectations are somewhat higher. But overall, it's really what we deliver across the whole of the platform that you should look at.

We'll now move to our next question from [ Martin Ekstedt ] from IDCM.

This was Martin Ekstedt from Handelsbanken and so 2 questions from me, please, if I may yesterday for growing Norwegian SME lending by 5% quarter-on-quarter. I think you started out by saying that you see healthy growth in your CCM division, but I assume you mean year-on-year then because quarter-on-quarter, it seems like you actually declined by 2%, 2.5%, if I'm right. I think you mentioned before that you said no to more business than usual. So I mean my quick interpretation would then be that one of you do or the other protected margins in Q1. Is this correctly interpreted?

Thank you for your question, Martin. I think I will refrain from commenting on what others are doing and just commenting on the development that we see. And if you heard me saying that our volumes grew for corporate customers in Norway, that was not precise. Our volumes were down 1.2% in the first quarter. It may be that those are currency adjusted numbers and what you're looking at are not. But where we see a stronger growth is on a 12-month basis, where it's 5.6% and 7.1% on deposits. The development was substantially impacted by syndication and distribution of a couple of large transactions that we did within commercial real estate that were closed towards the end of fourth quarter. And we talked about them when we released our fourth quarter earnings. So the inflow and new business that we have done has not fully compensated for the distribution and syndication of these exposures. But we have also, as you were saying, commented on our experience of a pretty fierce competitive situation in the sector. And I commented earlier on the call that we see this both on pricing and on structure, which is why we have also let certain exposures go and also said no to others, been selected also in many, but also lost a few transactions. We are, however, working very systematically with growth and future prospects, and there are plenty of opportunities to work on with our countrywide organization across the regions and many industries that are performing well also in today's market. So we're confident that we are competitive and will be able to continue to grow in this segment while also doing so at profitable levels.

Okay. That clarifies. And then second one, I had a look at your shipping portfolio, given what's going on in the Middle East and how it affects both oil and shipping and you're a large bank for both sectors, it was natural to take a look at your crude oil tanker portfolio that's NOK 17 billion out of NOK 54 billion in the shipping book. From what I can see in the fact book, you have no Stage 3 loans at the moment in that segment. And the medium risk category actually declined in size quarter-on-quarter. Can you just talk a little bit how you view provisioning for this part of the loan book at the moment in light of the war in the Middle East now? Are you reviewing collective provisioning? Or are you still working on an individual loan basis? Are you making more model-driven provisions and so on? Or is it just less of a concern for you overall at...

Thank you, Martin. It's Harold answering. The short answer is it's not a concern to us, several reasons for that. We don't basically do single vessel financing. So all the ship-owning companies we finance, they enjoy very high freight rates at the moment, partly driven by the obstacles in the Middle East. Second, I would like to emphasize is that all the ships we finance that are trapped in the Gulf, they have insurance. If that insurance should fall away, they have what we call a mortgage insurance. And on top of that, most of the ships that are trapped actually are there on the cost of the charters. So this is no concern to us.

Our next question is from Jacob Kruse from Bernstein.

Okay. Just one question. I just wanted to ask Carnegie in Sweden, I think you closed the savings account there as a product. What was the -- is that you shifting into DNB type account? Or are you changing the product mix in that business?

I'm not -- Alex, go ahead.

There are developments on the product side, but savings accounts in Sweden will definitely continue to be a part of the overall product offering, and this is then related on the private banking side. Okay. Okay. They seem to be in the process of closing on the website.

So we will now move to our next question from Shrey Srivastava from Citi.

Just one for me as well. The NOK 200 million of integration costs for Carnegie that you previously guided for this year, correct me if I'm wrong, but I don't think you took in this quarter. When would you expect to take these maybe even be phased through the year or backend?

It's Alex here. I can say that we've identified NOK 33 million in the first quarter. And as you correctly point out, the guidance is up to NOK 200 million when we consider it sort of evenly distributed up to that number throughout the year.

Our next question is from Thomas Svendsen from SEB.

So on the CET1 ratio, as you point out, it's the capitalization is strong. Do you think this is over time, what would be the buffer you would like to have above the FSA requirements, which already include all these buffers? And do you think the buyback program, is it -- do you think you have from a practical point of view, possible to adjust the capital with the buyback program?

We completed a 2.5% buyback program in the previous year. And you will find that every time we initiate the buyback program, we find that we have a more than sufficient capital buffer to the regulatory requirements. And as signaled or as mentioned during today's presentation, we have already sent our request to the FSA for such a renewed program this year. So we will, as soon as that is approved, give information back to the market. And I think that sends a signal also in terms of at least we're feeling that there's more than sufficient buffer at the current time.

And just to add to that, I think we agree 18.1% is a very, very robust capital position, 170 basis points, not only above the required, but also the expected level that includes the Pillar 2 guidance of 125 basis points. So it is a buffer on the buffer. And I know some of you have asked us to be specific about the buffer on top. We have not given a specific buffer also for a reason of wanting to be more flexible given that 16.4% already contains a buffer. But needless to say, the capital level we're at today is more than we need as a minimum requirement. We will continue to deliver on our dividend policy that you know well. It does include the buyback, and we will look to how to optimize that -- but I think the final messaging around our capital position is that we will continue to seek to pay out excess capital to shareholders in one way or the other over time.

We'll now take a follow-up question from Riccardo Rovere from Mediobanca.

A couple of follow-ups, if I may. The first one is [indiscernible] has paid, if I'm not mistaken, NOK 1.9 billion to the parent company, which has contributed to capital this quarter. Still the Solvency II ratio now, if I remember correctly from your book is 275% I was wondering why that is still going up despite the dividend at some point, this should be supposed to go down. So I was wondering whether the dividend that DNB the parent company is enough to push that number down or at least keep it flat. The second question I have is, you stated that competition in Norway is fierce is strong, but is rational. Do you see any reason why the market as a whole, not DNB, the market as a whole should behave differently in case rates had to go up differently from what we have seen, say, a couple of years ago when rates were definitely higher, a bit higher than today. I mean it's only literally a few months or, let's say, a few quarters since rates have started going down. So I was wondering why the market should all of a sudden change its behavior.

Thank you for your question. I believe solvency ratio is 274%. And of course, that is impacted by rate and rate expectations and the discounting of insurance contracts and varies over time. But you're quite right, for quite some time now, the solvency ratio has been way above the minimum level that we ask or that we require in order to consider paying up to 100% in dividend. This is also a result of the repositioning of the assets in the life insurance company, where we have reduced our volatility towards rate changes and increased the robustness of our ability to deliver on the guaranteed return. The reason why capital is being freed up. It's also that we have now passed the cap of level of volumes of guaranteed obligations to our customers and the growth that we take on the books are related to defined contribution. Now as I'm sure you also remember, I believe this was the third or the second time before year-end that we paid also extraordinary dividend up to the parent by upstreaming capital from the life insurance business to the parent. And I think we have guided on our previous Capital Markets Day on an aggregate of NOK 30 billion of capital, a combination of results and also freeing up capital in the coming 10-year period from the life insurance business. And I guess somewhere you're asking the question, should we do it even quicker in view of the solvency ratio. We do need approval also from the FSA to upstream the capital extraordinarily. I think we are looking to do this step-wise in a prudent and sustainable manner, but we have systematically shown you our ability to do so, and this feeds into our ability to grow and also our dividend capacity from the parent. Now I think it's a bit hard for me to answer your second question where you're asking me to predict the capital situation as such. I think we can only speak from experience and what we have seen so far and historically in the Norwegian market. And what we have seen is an increasing rational behavior over time. I think over time is important. And you know that businesses that run targeting profitability. I mean, they tend to adjust over time. And what we have seen is that an increasing number of banks have set return on equity as their most important target also being asked to do so, I think, and expected to do so from their owners. And I think this is the cornerstone of maintaining a rational behavior in the market. I think historically as well, we have experienced periods where markets are very liquid. We have experienced periods where people are fighting for positions, but we have also seen historically that this has adjusted back once the priority and the intent to deliver on returns again takes priority. I can only lean to what we have seen in the past and the fact that there is nothing structurally happening that leads us to believe differently for what lies ahead.

That's good. And sorry to get back one second to DNB. What I am not thinking, what I'm imagining is not quicker, but actually larger because the number, the Solvency II ratio, you are distributing capital to the parent company, but solvency at the best stays where it was, actually going up, but rates will go down maybe 1 day. So the 275 will get back to 260. But the number that never goes down. You see what I mean. So I'm wondering whether the NOK 30 billion that you have mentioned quite a while ago, that is still valid or not.

I think what we talked about stays in place. And keep in mind that the solvency is not only historical rates, it's also future rate expectations that are factored into this calculation. I can reiterate the messaging that I said earlier, and this incorporates our activity in the life insurance business. We will always seek to pay out excess capital to shareholders over time. This is very important in order for us to deliver on our minimum required targets on return on equity.

It appears there are currently no further questions at this time. With this, I'd like to hand the call back over to our speakers for closing remarks. Thank you.

Thank you so much. Thank you for your participation and your questions. And we hear from - we would like to wish you a good day. Thank you so much.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.