Nordnet AB (publ) (SAVE) Earnings Call Transcript & Summary

Good morning, and welcome to the presentation of Nordnet's Fourth Quarter of 2025. My name is Marcus Lindberg, and I'm the Head of Investor Relations at Nordnet. With me today, I have our CEO, Lars-Ake Norling; and our CFO, Lennart Kran. Lars-Ake and Lennart will start off by presenting the results, and then we'll have a Q&A session. [Operator Instructions] The presentation itself is available on our corporate website, nordnetab.com. Okay. Let's start the presentation. Lars-Ake, please go ahead.

Thank you, Marcus. So let's start with the highlights. We see continued strong growth in our core brokerage and fund business from a growing customer base and also positive market sentiment. Also really good net savings and strong customer growth. Overall, strong trading activity and another record quarter for cross-border trading, and we see high trading both in the U.S. markets, the European markets and some Nordic markets, not least Denmark with big swings in Novo Nordisk. We see a decline in net interest income due to lower policy rates, but it's partly mitigated by higher deposit levels. Cost growth is in line with target for the full year, around 8%, excluding Germany. We now also launched a new private banking concept in all of our Nordic countries, and it's been very well received. We have passported now the German -- or the Swedish bank license to Germany, and that's approved. And the H2 launch in Germany is on track. And the proposed dividend is SEK 8.60 per share, up from SEK 8.10 last year. Some of the financial highlights. Strong customer growth of 12%, savings capital up 15%, both from underlying market growth, but also very strong net savings. And number of trades up 16% from growing customer base, but also positive markets. Revenues is up 6%. We see a decline in net interest income from lower rates, but a very strong growth in our trading and our fund business. Operating expenses is up 8% year-on-year, including here, cost of Germany, so underlying cost development was lower, and that's mainly due to phasing of marketing costs versus last year or versus 2024, and continued profitable growth with profit growing 5% for the quarter. Looking for the full year, customers, savings capital, of course, is the same. The trades is also for the full year, strong, up 20%, both from the growing customer base, but also the volatility we saw around the tariff uncertainty during the spring, but also strong market sentiment in H2. Adjusted revenues up 6% for the full year, and we have a record revenue of around SEK 5.4 billion. And again, net NII going down due to low rates, but also that we sold the personal loans portfolio in 2024. But again then strong growth in the trading and the fund business. Adjusted operating expenses is 12%, including Germany, but excluding Germany, it's around 8% as per guidance, and cost in Germany was around slightly lower than SEK 60 million in 2025. And also a record on profit -- profit growth for the year of 5% to around SEK 3.8 billion. Also very good momentum both in customer growth and net savings. We have onboarded around 255,000 new customers in 2025, same absolute levels as in 2024. Also very strong net savings, SEK 78 billion for the year, up from SEK 73 billion in 2024. And our geographic diversification de-risks the business model and it enables growth. And we see here that savings capital is growing also more than the customer growth, except from Denmark. But in Sweden, Norway and Finland, we saw both good market development, but also strong net savings. In Denmark, we had very good net savings. But as you know, the Danish market had a very negative year in 2025 due to Novo Nordisk and Orsted and some other shares going down quite a bit. And looking a little bit on the different revenue streams, starting with trading. We see here in the graph to the left, the blue line, that's the number of trading customers going up with a growing customer base. Trades per trading customers is fairly stable in the quarter, but the share of cross-border trading is continuing to go up, both from the country mix since we grow more in Denmark, Finland, Norway, where they naturally trade a lot outside the home market because the home market is small, but also that we saw a strong trading market sentiment in both Europe and U.S. and also a lot of trading than in Denmark with Novo Nordisk. And trades per day, up 20% compared to 2024 and each trade drives 10% more revenue. And if you look to the left here on the graph, since '19, we have more than doubled the amount of trades per day. And that's, of course, since we more than doubled the customer base during the same period from around 900,000 customers to 2.4 million customers. But we also see that the trades per customer per day is a little bit up in 2025, both from the volatility we saw during the spring from the tariff uncertainty, but also a very strong market sentiment in H2, and we see also the income per trade is continuing to go up, and that's due to higher share of cross-border trading. Looking at the fund business, we see a steady growth in fund capital, and we have more than doubled -- or we have about doubled the fund capital since 2021 from SEK 150 billion to around SEK 300 billion now in 2025. We see also that fund margins are stabilizing as active/passive shift slows, but also when customers buy passive funds, they mainly buy Nordnet passive funds where we have a higher margin. And over 1/4 of the fund capital is now in the Nordnet branded funds and more than half of the customers' own funds. And we see a slightly lower net flow or net buy into funds in 2025 versus 2024. That's mainly due to the uncertainty during the spring where we saw outflows in March and April. Looking at net interest income, starting with the deposit level, and here we look at deposit level for the full year, and that's going from SEK 70 billion in the beginning of the year to SEK 84 million, up 20% from strong net savings and also high dividends. But of course, we also see a strong net buy during the year, driving our core businesses, a lot of buying and brokerage of funds. Looking at our snapshot that we normally do for NII and now it's a snapshot for 2026. Starting with the liquidity portfolio, we see or estimate SEK 1.6 billion in 2026, the same level as 2025. And the main sensitivity here is, of course, deposit volume because with this estimate, we see deposit volumes fixed. But we see a likely upside with deposit volumes with a growing customer base. Looking at liquidity portfolio in the quarter, it's up due to high deposits and stable lending. And overall, if you look at the interest rates passed on to the right, it's stable or slightly up in Sweden, Denmark and Finland, but it's going to be a little bit lower over the year in Norway, but from high levels. Looking at the loan portfolio snapshot for 2026, SEK 1.1 billion, also same level as 2025. Main sensitivity here is volume of margin lending, but we also likely will have an upside from customer growth and higher savings capital. And we see in the graph up to the left, the red bar here, that's margin lending volume that's been dipping a little bit, of course, during the spring with all the volatility, but has recovered nicely in the fall from stronger markets. And overall, we have a very low-risk lending portfolio, loan-to-value both of mortgage and margin lending is around 40% and virtually no credit losses. And looking at the margins, we've had a full pass-through of the mortgage margin -- mortgage rate with lowering of central bank rates, but we maintained the margin -- lending margin at fairly okay levels in spite of central bank cuts. Go to next. Looking at deposit interest snapshot, it's SEK 350 million in 2026. So that's a little bit lower than we saw in 2025. And main sensitivity here is amount of money on the savings accounts in each country, and we estimate that will go down when the interest rates are lower, but we actually saw a little bit tick up in the quarter in Sweden due to good growth in private banking. So in summary, very resilient revenues, bolstered by our diversified revenue streams. Looking at those, we see the red one is net interest income, the dark blue is fund and the light blue is brokerage. And we see strong growth since '19 in all of those revenue streams. Of course, a decline in net interest income in 2025 due to lower rates. So net interest income is around 40% of the revenue. But we expect net interest income to stabilize in 2026 as we showed due to that we are at the end of the rate cut cycle. And then it will likely start growing again from a growing customer base and thereby higher depositing lending volumes. Looking at the margins, of course, the deposit margins going down with low rates. We see an uptick in brokerage margin for higher share of cross-border trading but the fund margin continues stable around 25 bps. And overall, a business model with very good operating leverage. We have a very strong revenue growth, around 25% per year since 2019, but a limited cost growth of around 7%. So most of the top line growth ends up on the bottom line, so really true position of profitable growth. We also continue with high -- a lot of launches for our platform, both features and products. And we have focused quite a lot on the high-end segment during the year. And just to mention a few things in quarter 4 that we introduced as a first platform that you can have recurring savings in crypto certificates. We also secured same experience when it comes to setting up savings plans for fund savings as pension savings and also a lot more rich data from FactSet, both historic data and forward-looking data for our instruments that's been very well received by our customers. So with that, I think I hand over to you, Lennart.

Thank you very much. And yes, I'm very comfortable and pleased with the strong capital and liquidity situation that we still have and working on continue to having with a leverage ratio of 5.1%, which is the constraining factor, of course, but also a lot of room for further deposits because that is the risk here. We also, as Lars-Ake presented earlier, recommend a dividend of SEK 8.6 per share. which is an increase per share by SEK 0.50, but still within the targets that we have of 70% payout of the net result. We have also, throughout the year 2025 bought back shares, and we are continuing our program with that for about SEK 100 million until the mid-March. So a strong capital and liquidity situation, which makes us -- which creates a great flexibility for us going forward.

Thank you, Lennart. A little bit of our strategic focus and you probably recognize our strategic ambitions. We have four main ambitions starting, of course, with having the most satisfied customers by having this one-stop shop for savings and investments with a really good user experience. And then it's engaged employees. We know we can never have happy customers unless we have very passionate and talented staff and that we manage to attract and retain top talent, which we can. Then a sustainable business. We are in a trust business. We need to earn that trust every day, and most important is to have really a strong focus and management of our risks and also that we overall are a trusted and liked brands. Last area is profitable growth to capture the Nordic and German growth potential to continue to take market share in the growing savings market in the Nordics and then open Germany in H2 this year, and of course, continue to secure scalability and cost control in our business. And we have had a very strong growth in customers and savings capital over the years. We have very satisfied customers and a critical mass of customers also in each country and thereby, it works with customer recommending our platform to other customers. And customer growth and savings capital and the savings growth is the most important growth drivers for us. So customers sign up to the platform. They like what they see. They bring money from their other banks and start using our products. At Nordnet, we are taking market share in a growing savings market in the Nordics, but we still have a fairly low market share. So there's a long growth potential in the Nordics. And at the same time, we get extra optionality when we opened Germany in H2. We have 8% of the population on our platform in the Nordics, around 7% of the savings capital. That's up from 3% in '16. So we're taking market share, and we know also the underlying sales market is growing. Our highest market share in equities, but it's an area we're, of course, going to continue to focus on, but lower market shares in funds and pension, which is two important growth areas for us. Looking at the cost, we have a very scalable platform and also good cost control. Underlying cost growth is around 3% per year. But then we have decided to reinvest some of the leverage into future growth, so a little bit more product and tech and more marketing and German launch now also that we have set up a fund company and also pension companies in Denmark and in Finland. And the medium-term financial targets is reiterated from last year. Looking at the quarter, we are mostly on track or for the year, we are on track with all of those targets. We're only slightly behind on customer growth, 12% instead of 13% to 15%, but we -- and it's mainly due to -- I mean, there was a lot of uncertainty and volatility during the spring that's impacted a little bit the customer growth. But we see in 2026 that there's a good potential to reach the target level. It's positive markets. We continue to see effects of our marketing spend. We launched a lot of new products in 2025, but also the real income for customers is increasing with lower rates and also lower inflation. And a little bit the key priorities for 2026. Of course, there's been a lot of focus on the German launch in H2. Transport of the license is done. Most of the organization is in place, and we've really been able to attract good people, which I think is a good sign, and development is full speed ahead now ongoing. And a positive with Germany is that the government has decided to introduce a pension account from 1st of Jan 2027, where you can save without having to pay tax until you take it out from the pension account, so it's a tax-efficient savings account. And we know that from Sweden and other Nordic countries, those tax-efficient accounts are really good for attracting capital from customers and also increasing interest to invest in the capital markets. We're, of course, going to continue to -- our strong focus on our fund business and the pension business and not least to realize the potential in the Livrente Danish pension product. And we see that net savings and pension in Denmark overall is up 45% in '25 versus '24, and a big driver of that is Livrente. We're going to -- we focus a lot also on AI, both how we can integrate that into the products, but also make our internal processes more efficient. And on the product side, we just -- we launched since before AI summaries and news and now we just launched AI summaries of quarterly report, but it's going to be a lot more exciting features to come in the product area. On the process side, I think the most interesting area for us is agentic coding to see if we can make our development more efficient and get even higher throughput. And then, of course, since we launched our private banking in all markets, we're going to develop and capitalize on that launch, and also continue to release new functionality in this framework over the year. And last but not least, to maintain, of course, focus on cost control, focus on scalability and automation. So with that, I think I hand over to you, Marcus, for questions.

Great. Thank you, Lars-Ake and Lennart. So now we'll open up for questions. [Operator Instructions] So the first question comes from Patrik Brattelius at ABG.

Can you hear me?

Yes, we can.

Yes.

Perfect. Great. My first question is regarding the optimism there on the customer growth that you ended your presentation with. We are seeing that Sweden is taking positive steps and you said that you are optimistic that you will reach your target here in 2026. Can you elaborate a little bit on which geographies you are specifically optimistic about? And when do you foresee Sweden coming closer to the target level?

Yes. But overall, it's a good potential for growth. It's a positive market sentiment. Like I said, we launched a lot of exciting products last year. We have more real income for the customers due to low inflation, lower rates. So with Sweden, I mean, as you know, we're very strong in the investor segment there, the high-end segment, and we see if we can broaden into the more savings segments. And we see effect in a way of the marketing, the high awareness, higher consideration. And hopefully, that can also spill over to a little bit higher customer growth during the year. It will not be the same as in the other countries because the main focus and our strength is still in the more high-end segment. But I would say we have a good potential to have a good growth in Sweden, but also in the other countries and not least Denmark, where we saw very strong growth last year in spite of very weak markets. So with the market picking up in Denmark, it's going to be exciting to see that progressing over the year. Finland, we just passed 700,000 customers, really good momentum, but also really good momentum in Norway. So we are positive that we should be able to reach the growth target.

Okay. In terms of cross-border trading, we've seen an increasing share the last couple of quarters. How do you view this in terms of how temporary is this increase? Or are this longer trend that we should see continued increase of share of cross-border trading?

That's a good question. I mean it's part due to the country mix as we grow customer base more in countries outside of Sweden, so Norway, Denmark, Finland, where they traditionally trade more cross-border because they have a small home market. Of course, that trend will continue and drive the cross-border share over time. But then we also see not least during H2, strong cross-border trading, both in the U.S. but also in Europe. And not least we've also been launching 10 new markets in Europe for trading, which has been good, but also in some Nordic markets, especially Denmark around Novo Nordisk. But I think it's a big potential for cross-border trading going forward. Of course, the share of homebuyers is still strong with around 70% is invested in Nordics. So I think there's room to diversify more. But of course, is more and more foreign shares on the portfolios, and that in itself will lead to more cross-border trading. So I think we -- over time, we see higher levels. But then, of course, it will go a little bit up and down versus the market sentiment in different markets.

And as the last question is regarding the private banking concept that you have launched now in all geographies. Could you perhaps share some early reflections on geographical differences?

Yes, but it's been very well received in all of our markets. We've been running it the longest in Sweden since we launched in the summer, and we see an uptick in both net savings and customer numbers in the PB segment. I think we have a very big potential in the other countries as well, but of course, they've not been live that long, but off to a good start, I would say, and it's been, like I said, also very well received.

Thank you, Patrik. And next question comes from Jacob Hesslevik at SEB.

So two questions from my side. If we start with the new NII guidance for 2026, I assume that is on a flat or the current existing deposit base. Given it grew double digit, almost 20% in '25 over '24, what is your outlook on deposit development during 2026?

Yes. I think we estimate that deposit will grow in absolute terms from a growing customer base and also strong net savings coupled to that. Of course, deposit versus savings capital is probably not going to take any dramatic jumps unless we have a real downturn in the market, then of course, it will move really fast. But in absolute terms, we expect the deposit levels to grow.

All right. And then finally, the new German pension savings account launching in January 2027 appears to be quite significant. How large do you estimate this market opportunity to be? And what preparations are needed to capitalize on it?

Yes. I mean it's going to be affect all the working population in Germany. And only 70% of Germans today invest in the capital markets. There's, of course, a huge potential to track more capital into the capital markets, and you can buy ETFs and funds in that wrapper. And we know from experience from Sweden and Nordic countries that those tax-efficient wrappers are really good for attracting both capital, but also interest from customers in the capital markets. So I think over time, it's going to be a very big product, and it's very good that Germany has launched now a tax-efficient wrapper. They haven't had that before. So it's a big, big step forward. It's a bank product, it's not insurance product, so it's not that difficult for us to implement it either. We don't need an insurance company in Germany to do that at this stage. So it's, of course, a product we will secure that we have at launch or when the product is launched from 1st of Jan 2027.

Thank you, Jacob. Next question comes from Nicolas Vaysselier from BNP Paribas Exane.

Can you hear me?

Yes.

Just three questions for me. Should we go one by one?

Yes.

In Sweden, I've noticed the fund flows -- I mean, sorry, the net savings have gone down again sequentially this quarter. It's the same as happened for Avanza. Can you tell us what's your view on the momentum in net savings in Sweden?

Yes. I mean, overall, I mean, we see a strong pickup in the savings in Sweden in 2025 versus 2024. It was a little bit down in the end of the quarter, but it's more due to more one-off movements. We have customers in Sweden with really a lot of capital. So it can swing a little bit month-to-month, and especially at year-end, people always adjust the portfolios a little bit. It's nothing strange with that. But hopefully, we can -- with a positive market sentiment also in 2026 we should be able to see good net savings also in Sweden.

All right. And still in Sweden, so the increase in the ISK cap. I mean I understand it was already in force in 2025. Can you tell us among your customers, if you've seen people already making the most of the increase by adding more savings than their usual pattern in '25? Or is it something that we should see more coming in, in '26 or even '27?

Like I said, in 2025, we saw very good net savings in Sweden, both in retail, but not least in private banking after the new concept that we launched and part of that is probably due to the cap -- in retail, part of that is probably due to cap. Let's see how it plays out in 2026, but it should be good for the retail segment, for the flows from retail segment.

Okay. And in Finland and Denmark last year, you had meaningful product launches with the tax wrappers, the Livrente engine in Denmark and the endowment product in Finland. Could you have any update on the customer numbers you've signed up for each product? And what's the savings capital you have under each product?

Yes. So in wrapper, it's around 5,000 accounts and SEK 2 billion in capital, about the same in Livrente, but the Livrente is also pulling with it the bank pension. So in many cases, you cannot transfer your pension unless you can receive both the bank pension and Livrente pension. And before we couldn't do that. So we had lost out a lot of the transfers. So with Livrente, we get both Livrente money, but we then get the bank pension transfer money as well. So overall net savings in pension in Denmark is up 45% in '25 versus 2024, so around SEK 5.2 billion, I think, in 2025. So we're really happy with the pension development in Denmark. And of course, we want to see a little bit higher level on the wrapper in Finland, but it's building from below because, as you know, you cannot transfer a wrapper to us without realizing tax, which is an issue, but it's mainly built from the ground up in our customer base.

Okay. And just a last one very quickly because the line cut from the previous person asking. In Germany, the pension product, would you be looking to launch it from very early on in '27 for the moment?

Yes. That's going to be a very important product.

Thank you, Nicolas. Next question comes from Ermin Keric from DNB Carnegie. Can you hear us, Ermin? Looks like you're unmuted. All right. Well, we can let Ermin try again later. Let's go to Martin Ekstedt at Handelsbanken.

Can you hear me?

Yes.

Yes.

Excellent. So first question, I saw that fund income coming in above expectation seems to be a matter of fund margins in Sweden largely improving 2 basis points between quarters now. From what I can see at least quickly, this represents the largest trend break, a positive trend break for this otherwise declining margin. I think it's been declining since 2022 at least. So are we seeing a one-off quarter here? Is there a more sticky change in fund mix among customers? I think you mentioned in the presentation that there is more of Nordnet's own funds in the mix.