Okay. It's one minute past 4:00, and I think we have some critical mass, so we'll start. Is now exiting. Welcome to SEB's Q2 2026 Pre-close call. I'm Pawel Wyszynski, Head of Investor Relations at SEB. This call is being recorded. The script and the recording. Is now joining This call will be published on SEB's website after the call. I will cover rates, key P&L lines, REA, and capital- Is now joining followed by Q&A. We will only address disclosed information and public data. Please raise your hand to ask a question. Average three-month STIBOR is up five basis points quarter to date as of June 15th versus Q1. SEB has changed some Swedish lending and deposit rate this quarter, and most rates are available on seb.se. Average three-month EURIBOR is up 18 basis points quarter to date as of June 15 compared to the previous quarter, and the ECB increased its deposit rate by 25 basis points towards the end of the second quarter. Increased EURIBOR rates affect mainly our Baltic operations and mostly the deposit side. You can find the relevant deposit rates and changes on the domestic SEB websites for each of the three Baltic countries. Before turning to the P&L, I just have some FX remarks. The P&L is affected by the average FX rate during the quarter. All else equal, a stronger average SEK leads to lower income and lower costs. The opposite applies for a weaker average SEK. Compared to the first quarter of 2026, on average, the SEK has weakened marginally versus the euro. This would imply a small tailwind on income and a small headwind on costs. The balance sheet is affected by ultimo FX rates, where a stronger SEK reduces the level of total assets and therefore also the risk exposure amount. As our equity is SEK-denominated and is not hedged, a stronger SEK affects the common equity one ratio positively. The opposite applies for a weaker SEK. Ultimo SEK has strengthened marginally versus the US dollar and remained unchanged versus euro so far in the quarter, indicating only marginal FX effect on REA. In the Q1 2026 investor presentation that you can find on sebgroup.com, the currency split of risk exposure amount was 44% in SEK. Is now joining 37% in EUR and 8% in USD. A ± 5% change in SEK versus other currencies affect the common equity one capital ratio by around 40 basis points. I will now turn to the profit and loss lines, starting with net interest income. On volumes, I can just recognize that there is lending and deposit growth in Sweden and in the Baltics. Let's see how much of that we capture. Regarding sensitivity to rate changes, we would point out the simplistic approach to look at our equity, roughly SEK 215 billion, the private and corporate transaction accounts and savings accounts within the RB division, roughly SEK 380 billion, and lastly, in the Baltics, it's mainly the private transaction accounts and then some of our corporate transaction accounts. In totality, roughly SEK 125 billion. These volumes are all as of Q1 2026. In Q1, we had some effects which were booked within the treasury operations. These had a positive effect on net interest income and a corresponding negative effect in net financial income. These effects are, if anything, marginally lower in Q2, hence a smaller boost to NII and a smaller drag on NFI. Remember, these effects are neutral on income. Looking at the day count, there is one more day in the second quarter, which adds some SEK 100 million compared to Q1. Moving on to net fee and commission income. A large part of the net fee and commission income is derived from assets under management and assets under custody and is hence correlated to the general equity market development. The average equity market level looks to be up less than the ultimo as Q1 had a weak month of March. For most products, we calculate fees on a daily basis. Hence, it is the daily average that it is the most important indicator for fee generation. As in Q1, when comparing payment-related and commission income to the same period last year, keep in mind that we have exited a number of markets as part of the restructuring AirPlus. Corporate travel activity typically increases in Q2 versus Q1 due to seasonal patterns, although uncertainty related to the ongoing conflict in the Middle East is having a dampening effect on corporate travel activity. Moving on to net financial income. As shown in connection with our Q1 2026 presentation, looking at the past 12 quarters, the average quarterly level of net financial income is around SEK 2.1 billion per quarter. This is typically what we refer to as our best indication of the level around which this P&L item should move. Applying a plus-minus standard deviation as per Q1 resulted in a range of SEK 1.7 billion to SEK 2.6 billion, with the mean at SEK 2.1. Based on market developments thus far in the quarter, an outcome somewhere below the mean should be a reasonable proxy for this quarter. This does not include any XVA or revaluations of strategic shares as they are determined at the end of the quarter. Moving on to net other income. We have earlier stated that this row should normally be between SEK 0 and SEK 100 million. The past nine quarter, this line has varied between SEK -100 and SEK +300. For this quarter, due to some one-offs, we would expect this line to be in negative territory. Moving on to total expenses. As our CEO stated from the Q1 call, we can also clearly see that the cost consolidation at work. This really creates the freedom degrees that we would like to use for future to invest in prioritized areas. Looking at development of the SEB share price in Q2, it has gone up since the end of Q1. This will result in higher cost for outstanding long-term incentive schemes linked to the share price development. Please note that the share price in Q1 was down some 10% versus Q4 2025, and the share price is up in Q2 2026 is up some 10% versus Q1 2026. This effect will be visible on the cost line. To sum up, this effect was highlighted as a considerable contributor to the low run rate of costs in Q1 as the share price declined during the first quarter. This quarter will see the opposite effect if the share price remain at this level or higher throughout the end of the quarter. For 2026, we have a cost target of SEK 33.4 billion ± SEK 250 million, assuming average 2025 FX rates. In connection with the Q1 results, the target was adjusted for the FX movements in Q1, resulting in an FX adjusted target of SEK 33 billion ± SEK 250 million. The movement of the Swedish krona so far during Q2 should result in an upward revision of the FX adjusted cost target. The final figure will depend on the FX rate at the end of the quarter. Moving on to net expected credit losses. Just reiterating what we said in Q1, that the underlying asset quality remains robust and the provisions in the first quarter reflected a similar pattern that we saw during the course of last year, with a few exposures in a few sectors requiring additional provisioning. Moving on to imposed levies. At the Q1 result call, we said that for 2026, we expect levies of around SEK 3.3 billion. There is no change in this statement. However, the annual cost for the interest redeposit at the Riksbank will affect levies already now in Q2. This means that levies quarter-on-quarter will increase. All in all, levies will increase by some SEK 100 million from the Q1 level. RJ Manzo. Moving on to tax. Is now exiting. We've previously said that going forward, a tax rate of 21% is a good proxy for forecasting. Moving on to capital and risk exposure amount. SEB's current share buyback program amounting to SEK 1.25 billion ends no later than July 13, as stated in the press release on April 29. Risk exposure amount is affected by, among other things, FX movements, which I addressed in the beginning. You also need to think about the fact that lending volumes on a system level are growing again. Regarding the work on our Baltic IRB model since the Q3 2025, the Article 3 add-on has increased by SEK 32 billion for the Baltic IRB models. We stated last year that the impact on REA would be roughly SEK 50 billion in total. We stated that we expect to phase this in until Q2 2026. Hence, the remaining part should come now in Q2. This concludes our prepared remarks on this pre-close call. Please monitor how the FX rate close at the end of the quarter for the most up-to-date data. Before we move on to the Q&A session, I would like to highlight that we enter our silent period on July 1st and that our Q2 2026 interim report will be published on July 15th at 6:30 A.M. Swedish time. With this, we wish you all a good day and see if there are any questions. Magnus, looks like you're first one and then Namita. Magnus. Yes, hi. Just on NII there. In Q1, as you said, you had the SEK 200 million contribution in traffic, basically between NII and NFI. You said that you will still have a positive impact on NII, if I read you correctly. Does this mean that there will still be a tailwind on NII at the expense of trading income? Is that or NFI? Is that why you're guiding NFI below the normal 2.1, i.e. the SEK 200 million plus on NII negative NFI in Q1? Is that like SEK 100 million or SEK 150 million now? Is that how we should read it? As you say, we had a positive effect in Q1, which increased NII and decreased NFI. I stated that we expect this to still be here in Q2, but somewhat smaller. Delta-wise, there will be a negative effect on NII and a positive effect on NFI. It's more the customer activity which is driving the comments that I stated. Yeah. Okay. Thank you. Thank you. Namita? Namita. Hi, Pawel. On the equity of the SEK 215 billion, does that get impacted by the three-month STIBOR, or does the Riksbank need to raise rates for that to have a quote-unquote impact positive? I think it's a more complex question than that. We typically would use for simplification reasons, we would use a three-month STIBOR. Okay, fine. Thanks. Then on the Baltics, should I just think about the rate sensitive part of it being the SEK 125 billion of deposits, or do I need to think about the lending side and the mortgage side and how six months EURIBOR moves with that? I will try not to comment too much on moving parts. Yes, Baltics is a bit different compared to Sweden. One, you have the six months EURIBOR versus more three months STIBOR here. Yes, you're correct. It's more six-month EURIBOR, which is more important. We have three months EURIBOR, six months EURIBOR, up to one year EURIBOR, but I think the average is around six months EURIBOR. Of course, we have a little bit more deposits than lending in the Baltics. It also changes a little bit if you need to watch EURIBOR or if you need to watch whenever ECB increases their rates. I think given that ECB rates were hiked very late in the quarter, it shouldn't have too large of an effect for this quarter. Whatever happened from them raising, it's more the six months EURIBOR then. I do believe that we will go through this in much more detail at the conference call in connection with the Q1 numbers when we have the actual results in front of us. Okay, thanks. Then just final question. Yeah. On the fee side, have you done any big IPOs in the second quarter which are public information? I don't think we have done any large ones, to my knowledge. I think we've done a lot of smaller ones. All IPOs per definition are public. I think you should be able to see if we have been part of any larger ones. Okay. Thank you. Thanks. Jacob? Yes. Thank you. Just a couple of questions. First, on the expense line, I think in Q1 you talked about sort of seasonal decline in IT expenses, but also some kind of investment willingness. Are you able to say anything about the typical size of that seasonality for the quarter? Secondly, I wanted to ask on mortgage rates. It seems like growth is coming back a bit. It seems like it has translated into slightly better negotiated rates relative to STIBOR. Is that a fair characterization of what you're seeing in the market? I guess, are you starting to see a more constructive market basically on the mortgage side? Thank you. Yeah. Firstly on seasonality on IT, because I would put it like this. Seasonality, you typically have Q4 and Q2, as you know, a bit more heavy on the cost side. We did state quite clearly that in Q1 we were trending below our cost guidance kind of run rate, but we also stated that we haven't really scaled up all the investments that we wanted. We said we did have some positive effects from the share price. I think with that, I think you have most of what you need to lay the puzzle before the Q2 costs and the full-year costs. On the mortgage rates, we haven't commented anymore. I think they still remain at a historically depressed level than if they're wobbling around one or two or three basis points up or down. I won't be commenting much more on that, but again, let's get back to that in connection with the quarterly result. Okay. Thank you. Thanks. Nikolas? Hi. I was just wondering about the share price impact on costs. When we had a meeting with Christoffer Malmer a few weeks ago, you mentioned that you might be able to quantify to help us understand the drivers for the quarter. Could you give us some indication of what kind of impact we should think about for the share price increase of 10% for this quarter? It's a good question, I do remember that comment. Let's see if we give a little bit more color on that in connection to the Q2 numbers. I think this would be the wrong forum. Obviously, I'm raising it in the script, we raised it in Q1. We raised it in Q1 as a clear positive, we're raising now as a clear negative. At least you know that it's sizable I hope we could quantify a bit more, I think we'll wait with that until the Q2 numbers are released. Sorry for that. That's all right. I was also wondering about the impact from the FX, the SEK weakening here in the quarter for the cost target. As I understand it, you base the target assuming last year's average FX rates. If I look at the kind of SEK versus Euro, it's still actually a stronger Krona versus the Euro versus the average from last year. Shouldn't that lead to a further reduction in the cost target if that's the way you calculate it? Just help me understand here how you communicate that target and how you calculate it. Yeah, sure. The way we look at it is we look, for example, so take for the first half. For the first half, we compare the average SEK and Euro and dollar and currencies that affect us. We compare the average year to date versus the average year to date the same period last year. That is step one. Step two, for looking at how things will develop for the rest of the year, we look at second half of last year. We compare the second half of last year average to whatever is the spot FX at the closing of the second quarter. We extrapolate a spot for the rest of 2026, and we would compare that to the average of the second half last year. That is how we do kind of the calculation. All right. Is that the way you've always done it? If I'm not misunderstood, you just used to take the kind of historical for this year, and then you didn't make any assumption based on the spots for the next two quarters, but maybe that's just something that I misunderstood. No, you're right. I think last year we changed this in Q1. Last year, we pretty much took whatever Q1 or Q2 or Q3 effect, and then we annualized that to get the full year impact. Yeah. Rightly or wrongly, I think this is a more correct way of doing it because then you actually know what the average was last year, so you don't need to kind of assume that whatever happened in Q1 or first half will also happen in the second half. You can just compare to what actually happened the second half of last year, and then you can use spot. The only thing which you then as an analyst can use differently is if you believe that the spot for the rest of the year is incorrect, then you can put something else in and you can land your own estimate. I think this more reflects a true outcome compared to just an annualizing effect previously. All right. Then on the NII, should we think about any headwind from the AT1 issuance you landed here in the quarter? Yes, of course, but only a marginal one. I think the total NII drag from the AT1 on net interest income for the full year is SEK 150 million, and there's some roughly SEK 50 million from higher taxes as it is not tax-deductible. It was issued late in the quarter, so I think you will only get roughly one month in. It's not a huge drag. Yes, obviously it's not a positive for net interest income, no. All right. Then final question from me. You mentioned the NFI should be maybe a bit lower, versus the normalized level at 2.1. Could you say something about the reason for why we should think about a lower quarter for NFI? I think customer demand and positioning is whatever it is. I think given that this is somewhat of a black box for the market, we try to be a little bit more helpful in setting the estimates for analysts. All right. Thank you. Thank you. Sofie? Yeah. Hi, here is Sofie. Thanks a lot for taking my question. Just a quick one. On fees, last quarter, you guided for fees to be down year-on-year. Should we expect that trend to reverse now in Q2, or is it fair to still expect fees to be down year-on-year? It's a good question. I didn't include it in the kind of prepared remarks. Do your best as an analyst and try to estimate that, and we'll see what it lands at. Okay. Maybe if you could just remind us of kind of the fee trends that you saw in Q2 2025. Fees were down kind of quarter-on-quarter last year in the second quarter. I think the comment I made in Q1 earlier this year was as Q1 2025 was the strongest Q1 for net commission income ever for this bank. It was a choppy Q1 this year. Still, I think, there were expectations that it should increase quite significantly versus last year. I think that was the main reason, and that is also the reason why you had a decline last year, Q2 versus Q1, which typically is not something that you see. You typically see an uptick Q2 versus Q1, as Q2 is typically our strongest quarter from a fee and commission perspective. Okay, that's very helpful. Then just my second question, on AirPlus, should we still expect any one-offs or are all the one-offs done and should we expect any other one-offs in this quarter? We haven't had any one-offs to that extent in AirPlus, which I've been guiding for. We have closed down a lot of markets. Again, for those of you doing estimates year-on-year, please be aware of that. If you're doing your estimates quarter-on-quarter for AirPlus, I commented on the seasonality, but also the dampening effect from the geopolitical situation. In connection to the Q4 2025 numbers, we stated that the implementation charges for AirPlus should be half of what they were in 2025. 2025, there were some SEK 800 million. We said that you would have a delta of SEK 400 million, hence they should be around SEK 400 million for this quarter. We don't see these as one-offs. We also stated in Q1 that the AirPlus implementation charges in Q1 were not running at full year run rate. We haven't talked about any one-offs in Air Plus. I only mentioned that we have some negative one-offs on other income this quarter. Yeah, sorry, my bad. I meant the implementation costs, but that's very helpful. Thank you. Yeah, no worries. Thank you, Riccardo. Thanks, Pawel, and good afternoon, everybody. Just a quick one. With regard to the deposits in the Baltics that do not carry remuneration for the depositors, rates in the Euro area have gone up for the very, very few days in the second quarter. EURIBOR, three months, for example, started moving up well ahead of the actual rate hike by Christine Lagarde. This is what matters, right? Not the actual rate increase. For us, the transaction deposits in the Baltic countries are more based on overnight, hence they are actually much more correlated to the ECB hiking rather than not. Okay, Pawel, when you see, say, overnight, it means it kind of EURIBOR one month instead of three months? I think overnight is actually one day. Yeah, one day. Yeah. Okay, fine. Hence it's much more correlated to whatever the ECB is doing with rates rather than EURIBOR. Perfect. Okay. Again, I think we have been We typically comment on these calls, the move on STIBOR and EURIBOR, and we give you the volumes. We know that this is a simplified way of looking at things, but we give it because it is a good proxy for looking at the interest rate sensitivity. Fair enough. Thanks, Pawel. Thank you. It looks to be no further questions. With that, thank you all for calling in. We are here until the end of June. If you have any questions, please reach out to the IR team here at SEB. Thank you so much for calling in and have a great summer