Mandatum Oyj ($MANTA)

A very good morning from sunny Helsinki, and welcome to Mandatum's Q1 Audiocast. I am Lotta Borgstrom from Investor Relations. And I am pleased to be joined by our CEO, Petri Niemisvirta; and CFO, Matti Ahokas, who will guide you through today's results. During this audiocast, we will begin by presenting the highlights and key developments of Mandatum's First Quarter of 2026. Following this, we will proceed to the Q&A session, where you will have the opportunity to dial-in with any questions you may have. Participants can also submit questions through the chat, which we will review within the given time frame after the dial-in Q&A. With these remarks, I will hand over to Petri. Please go ahead.

Thank you, Lotta. And now let me walk you through our first quarter of 2026. The start of the year was good in our core businesses, even though the reported result was clearly impacted by changes in interest rates and our discount rate curve. Market sentiment was mixed in the first quarter. Geopolitical tensions, especially in the Middle East, affected the markets. Uncertainty increased towards the end of the quarter, resulting in a decline in our assets under management in March. However, market confidence has mostly recovered since then. Our capital-light business continued to develop very well. Capital light profit before taxes increased by 35% in year-on-year to EUR 26.8 million. This shows that our strategy is working and that we have -- that we continue to grow in the right areas. The fee result increased by 10% year-on-year to EUR 20.6 million. The growth was supported by higher client assets under management and good client activity. Client assets under management increased by 10% year-on-year to EUR 15.4 billion. Net flow remained strong at EUR 248 million, which shows that our clients continue to trust us and invest with us also in more uncertain market environment. It also shows that our sales performed well in different market conditions. At the same time, our operational efficiency continued to improve. The cost income ratio decreased to 49% year-on-year, which is a clear indication that our business model is scalable and that we can grow income faster than costs. The reported profit before taxes in the quarter was negative at minus EUR 25.9 million. This was mainly due to a more technical change in discount rate curve, which has a negative one-off impact of EUR 36 million on the net finance result and the group profit. Excluding the impact, our underlying profit before taxes was positive at EUR 10.3 million, which was weighed down by net finance result, mainly due to the low investment returns during the quarter. As we have said before, these items can cause volatility in our reported earnings from quarter-to-quarter. Our solvency position saw a strong increase to 203% during the quarter as a result of the sale of Saxo Bank shares. This gives us a solid foundation for our business and for future shareholder distributions. Overall, the first quarter shows once again that our underlying business is developing well. Our operations are processing as planned and that the quality of the result is moving in the right direction. Let me then move on to the client assets under management and net flow. Client assets under management reached EUR 15.4 billion at the end of the quarter. The year-on-year growth of 10% was supported by strong net load as well as the market. A strong net flow of EUR 248 million increased assets under management, also from the beginning of the year, despite negative market movement. When we look at the different business areas, Asset and Wealth Management continued to grow steadily, supported by both private wealth clients and institutions. Corporate net flow also remained strong with good sales, especially in personal funds. Retail net were stable and we continue to see good customer activity, especially in our Pohjantähti distribution partnership. Overall, the development shows that we are able to generate positive net flows across all market conditions and across all our key customer segments. In Asset and Wealth Management, we continue to see solid growth. Assets under management in this business area increased by 12% year-on-year. Growth was supported by positive net flow and good demand across our product offering. Private wealth management continued to develop well. Assets grew by 17% and year-on-year, supported by strong sales of discretionary mandates. International institutional assets also increased by 12% year-on-year. This shows that our international growth strategy continues to work and that we are able to attract new clients outside Finland. It is good to note that international investment money moves quickly. When markets are uncertain is usually led to more outflows and delayed investment decisions. On the other hand, when situation improves, money often comes back quickly. When looking at products, most of the net flow was directed to allocation products. We also continue to see good demand for credit products, which remain an important part of our offering. Overall, the development in Assets and Wealth Management supports our long-term vision of being the fastest-growing asset and wealth manager in the Nordics. Finally, a few words on profitability and efficiency. Our cost income ratio improved further year-on-year and is now 49% on a rolling 12-month basis. This shows that our focus on cost efficiency is delivering results. At the same time, we have made growth investments in asset management and corporate sales, such as new customer interface software and new requirements. And yet our cost to income rate has remained stable as we have improved efficiency in other areas. At the same time, the fee margin decreased slightly to 1.1%. This was mainly due to the changes in the business mix as the share of lower-margin asset and wealth management business continues to grow. It is important to note that our underlying product margins remain stable. This means that we continue to have good pricing discipline. Overall, we are seeing clear evidence that our business is scalable. We are able to grow income, improve efficiency and maintain profitability in our core businesses. I will now hand over to Matti, who will go through the financials in more detail.

Thank you, Petri. Let's now take a closer look at the first quarter result components. The fee result was up 10% year-on-year with assets under management up by a similar amount. The fee result is down slightly compared to Q4 as in Q1 fee expenses have increased due to growth investment within the capital-light area. Also, there's some seasonality due to the time [indiscernible] We are still able to grow the AUM sequentially. And note that the market development has been clearly positive in April, May. So AUM has recovered nicely. As Petri mentioned, the cost-income ratio of our client AUM was 49% unchanged quarter-on-quarter. And although our income was up, the increased FTE and IT investments in the capital-light business meant that cost in this area increased as well, and this is very much in line with our business plan. It's worth noting that the overall cost control remains good. Our group total cost income ratio continued to improve, and we're very much in line with our overall annual cost growth target of around 1% until [ 2028 ] that we published at the CMD last June. The net finance result was negative in Q1, and the main driver behind this was the discount rate assumption change that we announced earlier. The mark-to-market return on our own investment portfolio was negative as well, and I'll talk a bit more about this later on. Our result related to risk policies at EUR 6 million in Q1 was a significant improvement compared to last year. As you know, one of our key financial targets is to grow the capital-light profit before taxes by more than 10% annually by '28 compared to 2024. Looking at the first quarter, the reported profit before tax was EUR 26.8 million or 35% growth versus Q1 '25. Although we were a bit behind the target in 2025, we are now at an overall run rate well in line with our long-term growth target. If we then look at the different segments. Asset and wealth management profit grew by 20% year-on-year, driven by a 16% jump in the fee result. Corporate saw a significant profitability increase as the result related to risk policies increased due to a higher CSM release and a favorable claims development. The Retail segment grew as well, although the fee result was negatively impacted by the AUM development as well as a lower insurance service result, this was impacted by changes in assumption in the tax deductibility of voluntary individual pension contracts that will be -- the tax will be discontinued in -- tax benefit will be discontinued in 2027. Then taking a closer look at the net finance result. It was minus EUR 47 million and the earlier disclosed IFRS related change in the discount rate assumptions had a negative one-off impact of EUR 36 million. Despite the positive start of the year, March was a negative month in the financial markets. The with-profit investment to turn in the quarter at minus 0.6% was clearly below the expected level. Worth noting is that the development in Q2 has so far been more positive. Fixed income credit makes up 77% of our own investment portfolio. In Q1, the net return was negatively impacted by mark-to-market adjustments from higher rates and wider spreads. At the same time, the portfolio mark-to-market yield was up by 40 basis points in the quarter to 4.9% or significantly above the cost of liabilities. This means that the investment returns should also improve going forward. Our equity portfolio had a weak quarter in Q1. The legacy portfolio consisting mainly of Finnish illiquid small cap names was down by 9%. However, our private credit portfolio has continued a positive trend and private equity returns were positive in the quarter as well and both are seeing continued capital distributions. The other part of the finance -- net finance result or discounting and cost of liability. As you all saw, we saw market rates increase significantly in Q1. This had a EUR 14 million positive discounting impact but the impact was maybe a bit muted as the increase in the market rates was mainly in the shorter end of the yield curve, where most of our fixed income assets also are. As you all know, we announced a couple of weeks ago that we'll start using a new discount rate curve for our insurance liabilities. As you can see from the graph, the new rate is clearly lower in the long end and closer to externally observable swap rates and also more in line with industry standards. Although the change resulted in a fairly large accounting impact in the quarter, it's important to note what Petri also said that this impact will be offset over time. It has no impact on our cash flow solvency in our dividend capacity. We believe there's other benefits, as you can see from the slide as well compared to the very volatile old IFRS curve that we used. We consistently continue to generate capital. Organic capital generation was EUR 50 million positive in Q1 despite the negative IFRS result. The strategic asset derisking of the with-profit portfolio continues and is expected to further support the capital release going forward. Q1 was the second quarter in the history of Mandatum when the SCR from the with-profit business was smaller than the capital-light SCR. This also supports our transformation journey towards a high ROE capital-light group. The fully loaded group solvency ratio stood at 203%, up from 1.69 in Q4 and is clearly above our target range. Main drivers behind this increase were the completion of the sale of the Saxo Bank shares and the lower symmetrical adjustment factor. And finally, we paid back in March, the EUR 200 million loan that we used to finance the Saxo Bank shares. So the financial leverage decreased to 17.5% from 23.8%. And now back to you, Lotta.

Thank you, Matti. And now let's move on to the Q&A. Please dial-in or submit your questions via the chat.

[Operator Instructions] The next question comes from Vash Gosalia from Goldman Sachs.

I have potentially 3 questions. The first one, just on your investment results. And apologies if I missed this, but you have certain losses or the miss was driven by movement in listed equities. Can you just help us understand what is the composition of the portfolio there? And is it essentially something that you expect to recover relatively soon? Or is there something else going on there? The second one just on Saxo Bank and dividends. So just trying to understand the dividends for the year. So last year, you upstreamed somewhere between EUR 300 million and EUR 350 million combined from your life and asset management entities. But with the net EUR 100 million from Saxo, how should we think about dividends for this year? Is it a special that we can expect? Or would you prefer to then just upstream lesser this time? And then the third one was just on your fee margins. Could you help us understand how your fee margins compare to your competitors? So what do you charge versus what competitors in the market are charging?

Great. I'll take the first 2 ones, and Petri, if you take the last one. Obviously, the equity portfolio of -- that we still have of around EUR 100 million is very much a legacy portfolio consisting of very liquid small cap names. I think it's important to take also a bit of a longer-term view on this when we started our journey as listed company, we had around EUR 1.2 billion in equity. So most of the liquid names have been sold. And as you know, back in our Capital Markets Day, we've shown that we also have a clear path to have the kind of strategic asset allocation with around over 90% in fixed income instruments and the alternative part should be gone -- there's nothing funny going on. The Eco small-cap names have been hit quite badly and they're quite illiquid. So their positions that are quite difficult to get around. That said, remember, we're talking about EUR 100 million portfolio roughly where the illiquid parties may be half of it and in the big scheme of things, in our total -- even our own investment portfolio, this is a small thing. But negative development in Q1 for sure. And -- the long-term solution is to get rid of this. And -- but we, of course, are not selling it at any prices. Then regarding the dividend upstreaming. If we look at it, I think we've been very, very clear on what we expect on things. And the Saxo Bank net EUR 100 million is something that we did not pay out obviously in -- or is not part of the dividend proposal for 2025. We have our AGM next week, obviously. And then, of course, that means that, that is additional for potential for the Board to decide on the due regarding the 2026 dividend. But that is not included in the proposal as we mentioned in conjunction with the Q4 report.

Yes. And about the fee margins compared to other players in the market, of course, in an effective market, it's hard to charge much more than any other player in the market. Having said that, once you have really good products like we have in high yield side, especially our Nordic high yields, you might get some extra fee for that. You have continuously you have been the #1 in that segment, but of course, not that much. Investors are not willing to pay that much. Having said that, why our margins are quite high, compared to industries that we are in those asset classes where you traditionally can charge higher margins than in like plain money like with investments. So it's more or less the areas of asset classes where we act and we work those are traditional little bit higher margin levels than for Saxo investment grade or government bonds and so on.

And maybe one could also add that if we look at the net flow that we also were able to produce in Q1, if the margins were significantly different to our competitors, I don't think that would really work. So the market is what it is and that I think is important to note.

The next question comes from Hans Rettedal Christiansen from Danske Bank.

I have 2, if I may. So the first question is on the P&L this quarter and the fee results relating to investment services where you have the step-down from Q4 to Q1. And I appreciate the comments that you had, Matti, I'm just kind of trying to dig into the growth investments into the asset-light business that you mentioned. Could you elaborate a little bit on that? And is it relating to, I see on your employee side that you have sort of 4 new employees in Mandatum management. Is that what you're speaking about? And then the second question is on net flows this quarter. Just looking at the personnel funds where you've established 1 new personnel fund this quarter versus you had, I think, 4 in total last year. So how should we think about the kind of growth trajectory there for the rest of the year? And is there any kind of seasonality here? And could you characterize 1 new personnel fund that sort of normal? Or could it, in theory, have been higher and, therefore, also higher net flows. Those are my 2 questions.

Hans, if I'll take the first kind of the fee result development, Petri we can talk about what the investments in practice have been. But looking at the numbers, obviously, there is volatility between quarters in terms of especially sales commissions, which is affecting the retail and the corporate part, both internally paid and externally paid. Q4 was probably a bit low in the terms of sales commission and now Q1 is more on the normal side. And then as I mentioned, we did make a change in what we believe that the individual pension insurance policies, customers will pay since the tax benefits will end now starting next year. They will continue to pay, but we expect it's going to be a bit less than what we have estimated in our actuarial assumptions. So that also had a negative impact. And this altogether was maybe around EUR 0.5 million in the Retail segment altogether. But the growth in the -- or the investments we've made in the capital-light area.

Yes. SP-11 So investments we have done in a capital-light area, it's, let's say, 2 areas, people. So last 6 to 8 months, we have stated like a little bit more than 10 people, both in Corporate segment and Wealth Management segment. So especially in Wealth Management segment, really high -- really high level people to support our growth in wealth and asset management side and of course, quite price in that sense. And it's like in any other investments. First, you do investment, and it takes a while to get the benefits. people coming to new software supporting to our sales in -- it's more like a support tools and not very expensive more or less -- during the strategy period. We have a plan and we have introduced that in last June that we are keeping our cost base more or less the same. We only small growth in our cost base. So what we have done in order to cover these investments, we have streamlined our operations in support functions. So in all-in-all, it's not that heavy investments in a group level. About the net flow and personal funds, yes, there's only 1 personal fund, but it's seasonally -- it's -- the business goes so that during the Q1, Q2, especially, but also Q3, you build up the momentum for that. You have negotiated. It's building up the new person and it takes quite a while. Because it's all employees in the company that there is a certain regulatory framework, how you can do that. So it takes some time. and Q4 is where you close those deals, really. So it's always so the Q4 is main part of the new deals during the year. And you try to close those before year-end in order to pay the bonuses in next spring to those personal funds. So it goes like that. So it 1 closed person fund doesn't tell anything about activity. Really, there's a huge activity behind it and there's a lot of prospects going on. And there will be a good year as well on that side. What it is -- normally, you closed those in the latter part of the year.

And how would you characterize the activity on the personnel funds compared to last year? Is it sort of fair to assume that it's the same or?

It's more or less the same like it has been like last 3, 4 years. It has been more or less the same amount of personnel funds. We have a little bit changed our way of working. So we are concentrating a little bit bigger ones and not taking every person fund because the legislation goes so that it has been the requirement for how many employee company can be -- can established person fund when has come down every second year. And now it's very small. I think it's 10 people only companies. And that means also that the size of the personal fund will stay very small in a very long time. So we are a little bit concentrating more the bigger ones and to be very competitive on those cases. So it might be so that in number wise, it might be -- will be the same a little bit less. But money-wise, no changes compared to other years. So that's our plan at least.

Got it. That's clear. And just finally, is it then fair to assume that the majority of the net flows is coming from the private wealth side? I take sort of your comments on the last question there.

Yes. Like it has been mainly -- it's even though corporate, especially personnel fund net flow has been really good in -- especially in H1 during the years. Of course, the fastest-growing area of our net flow and business and assets under management is coming from asset and wealth management side. That will be the case this year as well.

The next question comes from Ulrik Zürcher from Nordea.

Just wondering about the unwinding rate for the year. That's unchanged, that EUR 10 million per quarter. That's the first question. And then I was just wondering about the 60 bps mark-to-market yield increase in the original portfolio. So just thinking about the unwinding rate next year, like how much of that 60% -- sorry, 60 bps increase is spreads versus base rates?

Ulrik, yes, you're correct that the unwinding rate for '26 is set and then next year, we will have a different rate. And of course, it depends on how the market rates move altogether. So it's too early to say exactly where we're going to end up. But it's true that now last year, we've seen a decrease in the market yield as well as the discount rate. Now with the kind of change we made it, of course, it's -- that's 1 structural change. But then, of course, it depends also where the rates are going to be at the end of the year. But I think it's fair to say that what we look at it is, of course, the spread between the mark-to-market yield and the discount rate and that has improved EBITDA, which is, of course, cost positive, and that's what is really driving the results. But the rate is not set for next year.

I'm just wondering because like yes, you'll get definitely have a higher expectation for the result this year, but I was just wondering about like it of the long-term spread because -- I just noticed you took a bit surprising the big loss on the fixed income portfolio. So I'm thinking that was a lot of spreads. So I was just trying to figure out the underlying spread between your liabilities and your assets?

I think there will be a small positive, but nothing dramatic. As we've said, it's around 200 basis points of spread, but of course, that can move 10, 20 basis points either direction from that side. If you look at the kind of portfolio, of course, one of the main things that -- if you look at in absolute terms, the -- on the original portfolio, the fixed income portfolio had a negative EUR 10 million mark-to-market impact. So there, you can see obviously what the kind of rest of the portfolio did. So actually, the discounting -- positive discounting effect was, as I mentioned, probably a bit more muted given the fact that rates in the really long end didn't change that much even though they change, they increased a lot in the short end. But there are kind of hedge ratio because most of the assets are also there. So they kind of offset each other.

And then just lastly, I was just wondering if you have an update on the derisking of the portfolio. Do you think it will happen this year? Or is it more likely next year?

Well, of course, the biggest thing of that were in the portfolio, as you can see, is that the alternative weight is very high. And there, we have kind of 3 different asset classes, we have the real estate portfolio, which has come down already. It's around -- at the moment, around EUR 70 million, EUR 80 million. And then, of course, you have the private equity and private credit. And the private credit, as I mentioned, has been distributing capital all the time, and it's performing very well. Private equity is the big question mark, and I think there's kind of positive signs regarding that as well if you look at the portfolio. So I think we're quite constructive, but it's out of our hands. And I think hopefully, we will start seeing things during the remainder of the year. And then, of course, continue there as well. But it's for sure not -- no changes there, and I think we're pretty constructive on the remainder of the year.

The next question comes from Antti Saari from OP Markets.

A few questions from my side. Regarding our international sales in this quarter, was it more from Central Europe or still from the Nordics?

Yes, Antti, it's Petri here. So it was more from the Nordics.

Okay. Okay. And then what about private credit market in U.S., it's pretty volatile, but not that much in Europe, but have you seen the U.S. development to affect your clients' appetite for private credit products in Europe?

No, not really. So let's say, so that they have a more deep conversation about this issue and the market as a whole. But once we have had those discussions and open up really how we are doing our private credit strategies. It's -- I would say that we haven't seen any loss of appetite to that asset class.

Okay. And then I would like to continue about discounting. The EUR 36 million loss that now booked, you will get it back. I understand that. But what about the base? Let's say that everything else, interest rate and everything else remains the same. How much would be the positive impact of that in the coming years? Can you give any kind of hint for that?

Yes, it's a very good question, Antti. Well, first of all, if you look at it, the portfolio is very -- the maturity of the portfolio is very, very long. And that means that -- so if it's EUR 36 million, it will come back in. It won't be 10 years, it might be 20 years or something like that. So you can calculate what the impact. So it's not huge. But that, of course, is -- remember, this is a discounted figure as well. So it depends also on the interest rates. But probably a couple of million a year, if you do the math that way. But that depends also -- remember, it's not an absolute -- the EUR 36 million is a discounted figure. So it depends also on the rate development, et cetera. So it will take a long time to come back, but it means, but it will definitely come back.

The next question comes from Kasper Mellas from Inderes.

First question is, was the new [indiscernible] fund included in the AUM at the end of Q1 at all? And when will this fully show in your AUM?

Yes. It was not so 0. So -- but as we have stated that we have or use some dry power because of the market changes and that it has been a really good timing for us to collect that commitments and deploy the money. But in Q1, there is no net flow related to that. And how it will come to our net flow, it's really difficult to say, but it's -- it comes at the speed that we invest the money and we call the money from investors, but it will take a while.

All right. Yes, that's clear. I just want to know [indiscernible] based on deployment. All right.

Of course, it's clearly supporting our net flow in coming quarters.

Yes, of course. You stated net fee profit from -- or fee profit from private clients was impacted negatively by the tax changes. So could you clarify a bit what this means in practice?

So what it means, obviously, is that in Finland now the tax benefit for individual pension savings, and this was announced already 1.5 years ago, 2 years ago. We'll end starting '27. And we believe that this will impact that people will pay less premiums to their policies. And of course, that means that the CSM will be lower, and that's what we did this change now in Q1. And that actually also meant that the insurance service result coming from the CSM release was lower as well. So nothing too dramatic, but yes, it did have an impact on our numbers. But especially on the retail side, the sales commissions make a much bigger role. And especially in the beginning of the year, we make an assumption on how it was. And last year, it was lower than maybe normal, especially in Q4. So that kind of even a doubt. But this is something which was already -- the tax change was announced a long time ago, and we believe that we still will -- people will continue to pay in these policies. But probably a bit less than or somewhat less than with the tax benefit.

All right. So the effect on European P&L is structural not onetime expense?

Yes, that's correct. It is -- if the CSM is lower, so the CSM release will be lower in the retail area as well. But especially, as I said, this maybe is like 500,000 in the quarter. So all-in-all, and so you can kind of that change is. But now we had the kind of more normal sales commissions, and that may vary during the quarters, which is kind of impacting the fee profit there.

All right. But the fee result from investment and asset management services also decreased compared to which to me, at least, was a bit surprising given that your average AUM was higher. So could you describe the relevant drivers behind this a bit more? For example, how significant was the cost effects related to international expansion?

Well, I think in international expansion, less so, but in general, the expansion did have an obviously impact is better very well described, both in terms of IT and FTEs. Remember, however, that Q4 or Q1 is a short-term month in terms of day count that has an impact quite significant actually, if you then do the math that there's 2 days less. So that had an impact as well and other items. So those are probably the kind of items I would single out on that line.

Okay. So in the income side, no, meaningful onetime items other than the account, which, of course, is recurring year-on-year?

Correct.

The next question comes from Jaakko Tyrvainen from SEB.

Jaakko Tyrvainen from SEB. Still a couple of questions. Let first one on the international business. Petri, you mentioned that the money there is much more rapid in its moves -- does this imply that you probably see a bit abnormal outflows during the quarter, i.e., how strong was the kind of gross inflows overall during the quarter? And should we expect based on what you said, that the money could be returning during the second quarter already?

Yes. That's something, of course, we have noticed already during the previous quarter. One year part of the money we are getting outside internationally outside of Finland is is based on platforms and that kind of distribution channels, we don't have the, let's say, deep connections or any connections to end clients. So once there's a turbulence in the market, the money is not that sticky like it is like if some like pension fund has invested EUR 10 million, EUR 20 million after long decision-making process and meeting our portfolio managers and so on. So that kind of money, it's more in and out in crisis situations, and that's what we are referring to. So -- but like you mentioned, it's also when the market normalizes, it comes back quite soon as well.

Then on the strong risk result during the quarter, but you are already too on the factors behind. But could you wrap up the kind of the key drivers for this from Q1 level? And should we continue to assume kind of a so-called normalized level a bit below what we saw now in outlook?

Yes, absolutely. If you look at it last year and we this a year ago and also in Q2 that we believe that the risk result was lower than what you should expect for a couple of reasons. And -- now I think the CSM release is kind of on a normal level. The claims development, however, was a bit more favorable. So from the EUR 6 million, you probably like EUR 1 million, EUR 1.5 million was kind of potentially recurring. We obviously don't know, it depends on the development. I think we've kind of outlined on a run rate somewhere between EUR 15 million, EUR 17 million could, of course, hopefully be better. But I think that's the best guess we still have at the moment. So kind of 4.5%, 5% per quarter is probably a good estimate here. But I think it's important to note that now it's the fans here. So it's -- this is a much more stable development. And we'll be still able to grow the CSM. So it's not that we are releasing much more I think now it's kind of more normal development than what you should expect going forward.

Excellent. Then final 1 a bit technical. On the net proceeds from the fact exit, where is this capital sitting. Should we assume that -- I assume that it's in the parent company and invested in short papers and where should small interest on that short paper be visible in your P&L, is it on the -- on the other row?

Well, a very technical question indeed, Jaakko. It's the other. It's where it stands, and you are correct that we got the EUR 300 million a bit more, and then we repaid the EUR 200 million loans. So we -- that money is invested in fixed income, short-term instruments.

The next question comes from Emil Immonen from DNB Carnegie.

Just 1 more maybe on the net flows -- if we look at your net flows during the last 12 months, would you say that you're happy with the current level as it has been decelerating a little bit over the last few quarters?

Yes. I would say, of course, as a CEO, I always want to have more, but it's having in mind the circumstances, especially now in Q1 and especially in March. I'm happy with our net flow also during the last 12 months. But of course, once we have already discussed today, we have invested to our distribution in order to get more. So of course, that's our target and that we will like to see bigger net flows in coming months and coming years. Of course, it's also true that we have a bigger assets under management portfolio now, and there is natural outflow also from your portfolio. So we have to run faster and we have to sell more in order to create the same amount of net flow. And then of course, we are targeting to our targets are higher than what we have seen in the past.

So if I understand correctly, you're increasing investments and recruiting more people to, in the long term, accelerate further net flow net driven growth?

Yes, exactly.

The next question comes from Michele Ballatore from KBW.

I have 2 questions. The first, sorry if I missed it, but can you maybe give a little bit more color on the dynamic of the capital generation the organic capital generation in the quarter. And if you can maybe -- is there a normal run rate, quarterly run rate of capital generation maybe that you can talk about? This is the first question. The second question is about capital management, you mentioned considering the level of solvency now, you may do more in terms of distribution. Does it mean like a higher dividend or you're also contemplating share buybacks or special dividends? How should we look at that?

Yes, Mike, regarding capital generation, of course, there's 2 parts to it. One, of course, is the capital-light profitability. So that -- and that was maybe a bit higher than what you should expect going forward. The capital-light profits were EUR 27 million, and it was EUR 50 million positive altogether. And if you look at our kind of investor presentation, there was a EUR 2 million negative impact from the with-profit portfolio. So obviously, within the kind of capital release from the portfolio derisking was 0 to negative. And of course, the IFRS results were negative as well. Important to note, however, that the discount rate change had has no impact on the OCG. So -- so that also is important to kind of, I think, single out there. But overall, the OCG is driven by 2 factors: own funds generation and -- and now the SCR, especially in the retail segment went down because of the -- first of all, the symmetrical adjustment but also the lower -- slightly lower -- so that helped the situation altogether. But the building blocks are capital-light profits or -- and then with profits and then the own fund generation and the SCR, which typically would not be positive, but it was positive now in Q1. So a bit more positive altogether than 1 should expect. At the same time, as you can see, the with profit contribution was negative, so that should be actually positive there as well. So higher than the IFRS result typically, and then there's other moving factors altogether. But I think the EUR 50 million is probably as a run rate slightly higher than maybe one should expect . But as I mentioned also, the with profit contribution was negative, and that's lower than what you should expect. Yes. And then you were asking about the about the capital distributions, I think our Board has been quite explicit that the current structure of dividends is the preferred way forward. And at least I haven't heard of any changes on that point. don't look at the dividends as extra or recurring. It's more on the fact that -- and what is driving it is the liquidity in the holding company. Solvency is more than enough. And now, of course, as I mentioned in the previous question, we do have a lot of cash involving company as well. And then the rest of the dividend capacity is coming from upstream dividends from the Life company and the asset management company, and those are the building blocks here altogether. So I think the dividends, the Board will decide then for '26 sometime in the beginning of '27. And remember, our AGM is next week. So we haven't even paid the dividend '25 out yet. And that's going to happen next week.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So that concludes today's audio cast. If you have any further questions, please feel free to reach out to us at Investor Relations. Thank you for joining us today, and goodbye.