Good day. Thank you for standing by. Welcome to the SEB financial results Q2 2026 conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Johan Torgeby, President and CEO. Please go ahead. Good morning. Welcome to summer in Stockholm to SEB's second quarter financial results presentation. Starting with the highlights for the second quarter, we once again established positive jaws, where income grew faster than costs, reflecting a very strong business momentum that we've experienced during the quarter. We noted a new high for our net fee and commission income, supported by high customer activity. We definitely saw some change to the demand for borrowings, including an acceleration of corporate lending growth. A few events during the quarter that I'd like to highlight. First, after the 7% increase Q-on-Q for our asset under management, we broke the notable number SEK 3,000 billion for the first time. Our corporate bank in Germany continues to develop very positively. Now we are ranked as the third most appreciated foreign bank in Germany, according to the German corporate customers. Thirdly, we have partaken in an initiative which is cross-industry in the Nordics to ensure and promote European and Nordic competitiveness. This is called Nordic Compass. SEB's contribution in this group will predominantly be focusing on capital markets, deep tech, defense, and energy. Moving to the next slide. On our business pulse, starting with corporate and investment banking, we saw broad-based corporate credit demand increase with a 5% loan growth Q-on-Q. We also had close to, if not a record quarter within activity for the capital markets. A very strong ranking in equity capital markets league tables. Here are some logos of the more notable transactions publicly done in the quarter. Also great to see that this year's customer satisfaction survey has been concluded for FX in Sweden. We came out on top. For business and retail banking, we clearly saw an uptick towards the end of the quarter when it came to loan growth. Here in this slide, we have mortgages. We've made significant number of changes and improvements to our mobile app. We can also see that mortgage applications right now are up 27% compared to the same period last year. We still don't have the market share number for June. It definitely looks promising and moving in the right direction. When it comes to WAM, we have a headline number of net sales of SEK 11.5 billion. However, during the quarter, there has been a one-off event in Lithuania where the pension funds available to the public has made available. Therefore, there's been a one-off outflow of SEK 11 billion. This is included in the SEK 11.5 billion, so the gross number of net sales excluding this effect is actually SEK 22.4 billion during the quarter. In the spirit of wealth and asset management, where we try to develop timely and attractive products within the three categories of alternative investments, passive investments, and thematic investments, here are three examples of what we've developed lately. This quarter, we closed the SEB Nordic Energy Fund with an AUM of SEK 8 billion. We have launched a new SEB Global index-linked fund priced very competitively, and we continue with the thematics around defense and security to give a new opportunity to invest in this very important area for the future. Finally, Baltic is motoring on. Similar picture as last quarter with very strong growth, particularly within mortgages and SMEs. And we've also received from the ECB a formal approval to merge the three banks, which is on track, and we aim to conclude in conjunction with the year-end. You may also have noticed that we have made some management changes with regards to the Baltic division announced this morning. Nina Eikaas, after very successfully leading the Baltic division, has been appointed the new Head of SEB in Finland. And we're also very pleased to announce that Sonata Gutauskaitė-Bubnelienė has accepted the role as new head of the Baltic division. On the next slide, looking at the loan portfolio of SEB, we have experienced some loan growth during the second quarter, predominantly driven by corporate lending. We're up 4% quarter-on-quarter, FX adjusted. On the next slide, looking at the result for our ambition to aim for positive jaws, it is encouraging to see that for the first time in some time, we did experience positive jaws in the second quarter of this year. Income rose more than cost, both Q- on- Q, and year-on-year, and our aim is, of course, to design our strategies and efforts with this in mind. With that, I'd like to hand over to Christoffer Malmer. Thank you, Johan. On the next slide, we start with the summary financials. Total revenue increased compared to Q2 of last year, reaching above SEK 20 billion, with both net interest income and fee and commission income posting year-on-year increases. Fee income increased by 8% from Q2 of last year, and as Johan mentioned, reached the highest level we have ever recorded in a single quarter. This reflects solid performance, particularly within our capital markets related activities against a constructive backdrop for global markets during the quarter. The activity level in Q2 also reflects some of the pipeline that was held back during the first quarter following the outbreak of the conflict in the Middle East. With this in mind, we should expect the seasonal third quarter effect to be somewhat more pronounced than usual this year. The net financial income includes a contribution from our ongoing disposal of our shareholding in Euroclear. We entered into an agreement to sell our shares at the end of June. I'll come back to the financial effects of that shortly. The underlying divisional net financial income is largely unchanged from the previous quarter. Net other income is impacted by market valuations of non-core assets held within corporate investment banking, and this has had a negative effect of some SEK 300 million. Turning to costs, total operating expenses amounted to SEK 8 billion for the quarter, largely unchanged from Q2 of last year. Sequentially, however, costs increased from Q1 by 5% or around SEK 400 million, half roughly of which is attributable to the impact on our staff costs from equity-linked remuneration, where, as we've communicated, a higher share price has resulted in higher costs. The underlying cost development reflects the results of our ongoing cost consolidation, along with our continued investments in the prioritized areas of AI, regulatory readiness, and resilience. As usual, we update our cost target for FX rates during the quarter. This quarter, the weaker Swedish krona has resulted in a small upward adjustment to SEK 33.3 billion ± SEK 250 million. Looking at the run- rate of expenses for the first six months of the year, we are currently tracking below that full- year target level. As you know, we typically incur a larger proportion of our full- year costs in the second half of the year, and we are also still in the process of ramping- up some of our investments in our prioritized areas. That said, we are in a good position to meet the target or even come in somewhat below it. Importantly, our focus on operating jaws allows us to make investments in order to accelerate income growth. Continuously, such opportunities will be evaluated and considered as an alternative to lower costs. Net ECL of SEK 345 million or 5 basis points is a decline from Q1 and in line with the second quarter of last year. We have continued to release some of our portfolio overlays in the quarter, around SEK 250 million, specifically those that we reserved for the potential impact from U.S. tariffs. Our underlying asset quality remains robust. Within imposed levies for this quarter, you will see the impact from the deposit requirement with the Riksbank. The full- year effect of this is SEK 150 million, which is fully accounted for this quarter. Full- year imposed levies are now expected to come in at SEK 3.5 billion, up slightly from the SEK 3.4 billion previously communicated. The tax rate of 19%, marginally below our communicated guidance, resulting in a net profit of SEK 8.7 billion and an EPS of SEK 4.4. The return on equity for the quarter came in at 15.7%. The impact of our overfunded defined benefit scheme on our return equity continues to be material. For comparisons, we inform you that the return on equity adjusted for the surplus in the pension fund amounted to 17.4% for the quarter. Turning to net interest income on the next slide. NII increased from the previous quarter by 4% or some SEK 450 million. We have talked about a lag of some three to six months for a change in policy rates to feed through the balance sheet, and this is effectively what we have seen playing out over the last few quarters. The most important contributions to the NII increase in Q2 came from the Baltics and the Corporate and Investment Banking division. Our Baltic Bank saw the benefits of higher ECB rates, along with continued volume growth of both lending and deposits, as Johan mentioned already. The net interest income in the Baltic division has now increased sequentially since Q3 of last year in local currency. Within CIB, its higher lending volumes, cash management-driven deposits, and investor services supported by the dividend season that contributed to the higher net interest income. We also recorded a somewhat elevated level of NII within our markets operations. Business and Retail Banking saw a modest drop in NII, partly reflecting internal calculations on day effects and some headwinds from the card operations. Deposits grew across both private and corporate customers. Corporate lending volumes increased modestly year-on-year. As Johan mentioned, household mortgage volumes did pick up pace throughout the quarter. In June, we recorded the highest number of mortgage applications we've seen for many years. Our efforts to increase speed and simplicity, combined with competitive pricing, have yielded results and leading to those improvements. Encouraging so far and hopefully more to come. Finally, within treasury operations, we had some traffic between net interest income and net financial income, similar to what we experienced in the previous quarter. That's impacted our net interest income positively by around SEK 100 million, being then offset by corresponding negative effect in NFI. Turning to the next slide, a net fee and commission income, the level of SEK 7.2 billion represents a notable increase from the previous quarter as capital market activity resumed following the slowdown that occurred after the Middle East conflict. It's also an 8% increase from Q2 of last year, marking a new quarterly high as previously referred to. Within Capital Markets, Corporate Finance and ECM performed strongly, while Transaction Services enjoyed a seasonal increase linked to the dividend season. Outside of CIB, fees also increased within Business and Retail Banking, primarily within the card business. This is partly seasonal. Also, a recovery of some of the postponed travel-related fee income in our AirPlus during Q1. Card fees were also the main driver of the higher fee income in the Baltics. Within Wealth and Asset Management, net inflows, as Johan mentioned, were robust at SEK 11.5 billion, despite being materially affected by the Lithuanian pension reform, which has led to significant industry-wide outflows. Excluding the effects of the reform, underlying net inflows above SEK 22 billion. Turning to the next slide, a net financial income increased to SEK 2.4 billion, with a large contribution from our shareholding in Euroclear. Firstly, we received the annual dividend in Q2. As I referred to earlier, we also entered into an agreement to dispose of our shareholding. We have been a shareholder of Euroclear for many years. We have considered this a non-core asset for the bank. It has been continuously reviewed. The opportunity that we have decided to proceed with values Euroclear at a total value of more than 20% above where any previous transaction has been conducted. The total capital gain from the sale amounts to EUR 76 million. Due to a pending approval process of the disposal, we have, for prudency purposes, accounted for EUR 41 million of that amount in this quarter. The impact on our CET1 ratio from the sale is estimated to be around 15 basis points, of which 10 basis points will come at the time of closing. The divisional net financial income amounted to SEK 2 billion, in line with our historical quarterly average, which is now adjusted to account for the change in our strategic holdings portfolio. On the next slide, we move on to our capital development during the quarter. We started the quarter with a CET1 management buffer of 290 basis points, or 250 basis points pro forma for the remaining phase-in of the Baltic IRB effects. That remaining Baltic effect of 40 basis points have now been phased- in during the second quarter. We also have some model developments going in the other direction. You will see the net effect of 16 basis points under model changes and other. You will also see that the increased lending has led to higher REA and impacted our CET1 ratio by 44 basis points in the quarter, and the weaker Swedish krona has had a negative effect of 10 basis points. Adding the retained earnings for the quarter and deducting the share buybacks gets us to the quarter end buffer of 250 basis points. Finally, as usual, we would like to share our latest thoughts on AI. This quarter we want to focus on how we manage AI costs, particularly as pricing models are changing and a larger share of compute is now gradually being passed on to end users. Just as a quick recap, our AI rollout in 2025 focused very much on rapid adoption and learning across the organization. In 2026 now, we have shifted the emphasis towards disciplined scaling, concentrating resources on the use cases with the greatest potential, while also applying stronger cost awareness, token governance, and appropriate guardrails. As pricing models now evolve and more compute costs, as I mentioned, passed on to end users, we're assessing each use case based on factors such as complexity, security, value creation, suitability of a particular model, and the slide in front of you illustrates some of those dimensions. In short, we want to use the right model with the right guardrails in the right kind of environment for each individual use case. This does not remove the room for exploratory or opportunistic AI use, and not every initiative needs to meet the formal ROI hurdle. It does mean that we want to track cost usage and value creation closely as AI adoption now matures across the organization. As usual, on the final slide, we conclude with our financial targets, which remain unchanged. A 50% payout ratio, a capital buffer of 100 basis points- 300 basis points, and a return on equity of 15%. With that, I hand the word back to Johan for any concluding remarks. Thank you. That concludes the prepared remarks, and I'll now hand over to the operator. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take our first question from the line of Andreas Håkansson from Nordea. Please go ahead. Thank you, and good morning, guys. First, Johan, you often talk about how the bank hasn't been firing on all cylinders, and you print a very good return on equity now. How does that feel today? Are you now getting close to it, or would you say that you're about to actually be delivering in all areas at the moment? Hey, Andreas. Thank you for the question. We definitely have started a higher pace, but it's certainly not firing on all cylinders. The one that clearly has contributed this quarter is the corporate and investment bank. Both the corporate loan book that grew 4% or 5%, that's a positive change. The real staggering numbers are really on the fees and commission from debt and equity issuance up 100% + on the quarter, advisory fees up 30%. As it is the highest fee and commission number for the group, we clearly have used more of the bandwidth of the bank. However, there's nothing really coming from loan fees, which is very large. I think that was the line that was actually down. That is a lot of upside potential if you look at the potential of the bank. Then, of course, we have BRB. Retail and business banking is certainly nothing to brag about. We are improving, but it is towards the end of the quarter. Also Wealth and Asset Management has more, particularly on the financial results. We broke SEK 3,000 billion of AUM, up 7% on the quarter. There is definitely hope that we can generate a better financial result. That's interesting. If I take out your one-off in trading, your return on equity is 15% in the quarter. Coming back to the ROE target that Christoffer, you mentioned, you say that it's a 15% ROE target, in reality, you talk about the long-term aspiration, which just doesn't say when you're supposed to deliver it, and aspiration sounds quite soft. Isn't it time to actually put your foot down and give us a firm ROE target, or should we skip the aspiration already now and say that you are going to deliver 15%? We have not changed our assessment of the aspiration. You think about it as a three-year moving around some type of number. You will have had the last decade, most years below or significantly below. You've had two years where we were significantly above, and it goes up and down. The reason why we haven't looked at it now, we looked at it in December last, is really that in the medium term, price elasticity and competition in our assessment tends to work towards a mark, and that mark we say is around 15%. Then it is probably reasonable to assume during a cycle of two to three years, ±200 basis points. That if we go 200 basis points below, we're starting to feel that we have a problem 200 basis points above, we start challenging sustainability of that number. No change here now, I'm happy for the tone in your question because I find it constructive. Sounds good. Thanks, guys. Thank you. We will now take the next question from the line of Magnus Andersson from ABGSC. Please go ahead. Yes, good morning. Just on the corporate lending where it seems to be an inflection point here in this quarter finally. If you could just share with us if you see it as purely demand-driven, and if that's the case, how robust you feel this is given the signals you get from your client base? Also mentioning if you have taken any measures in the first half of the year in terms of pricing or other measures in order to achieve this as the first question. Thanks, Magnus. Yeah. I would say that we don't know the market yet, but it does feel, at least from my perspective, that activity overall has picked up. That's the beta. The alpha is, of course, that we need two-way traffic. We need a lot of buyers and sellers of things and demand to pick up for SEB to come to its right, and that certainly happened this quarter. We have made an enormous effort, but it's not rocket science to focus on the business as we've had two, maybe three quarters where we've been discussing, are we as forward-leaning as we should be, given that some other data points really pointed to us not being sure that we performed. We started that in Q1. That's really internal communication, focus on business, focus on winning, and making sure that we stay relevant to the customers we have and attract new ones. Then it's always hard to know what is what. We will see when everyone else comes out, but this at least it's a clear shift if we compare ourselves to ourselves. It's a much better trajectory right now. Okay, you said it was clearly an uptick towards the end of the quarter, right? Yeah, I would say that April was very much similar to the crash in March. May, things really stabilized and picked up, and then we saw a very high activity in June. Okay, good. Then secondly, just on NII there, Christoffer, I might have missed something, but just out of the SEK 10.7 billion you print in this quarter, how should we look at this number going into the second half? What portion of that would you say is of a more kind of volatile nature that might not repeat? Thank you, Magnus. Yeah. There's two things that we're calling out, as we typically do in the markets business when we have an elevated NII. That's about SEK 100 million or so for the quarter. We have this traffic between NII and NFI in the quarter that is within Treasury, and that's also in order of magnitude SEK 100 million. Positive NII, negative NFI in the quarter. Those are the elements which are to your referencing a bit more volatile and harder to model and predict. Yeah. Okay. On NFI, you said the new normal levels, so to speak, after the divestment is SEK 2 billion per quarter, right? That's right. Yep, that's right. Okay. Thank you. Thanks. Thank you. We will now take the next question from the line of Sofie Peterzens. Please go ahead. Yeah. Thank you a lot for taking my question. Here is Sofie from Goldman Sachs. My first question would be just going back to the fees. The fees were very strong, but you also mentioned that there were some of the equity and debt capital markets fees were up, or advisory fees were up 100%. How sustainable are these fees, and how should we think about the fee trajectory going forward? If you could maybe just comment a little bit around that. My second question would be around the Cum-Ex in Germany. We saw some headlines from BaFin earlier this week. Is there anything you can comment on your Cum-Ex case that has been going on for some time now? Thank you. Thank you, Sofie. I would first say on the fee and commission, when you break it down on issuance of security, secondary market, et cetera, the percentage numbers are very volatile as every single number is not that big. Obviously there is nothing sustainable around 100% up and 150%. These are clearly rebound numbers in a very strong quarter, Q-on- Q with seasonality, et cetera. We know that Q3 will be a very quiet quarter, so I would actually look to Q4 to make judgment of what is this environment really in terms of volume and transaction propensity. That being said, this is a very strong broad-based quarter if you look at what we did. We have the defensive type of transactions where you have capital raisings to shore up a company. We have the offensive type of transactions, M&A driven financing, forward leaning, acquiring something. We have several strategic transactions where you try to shift focus in a firm or reallocate in an investment company. Of course, the bread and butter beneath that, which is just normal course of business. The pipeline does not indicate this falling away. It looks very active. The dialogues are plentiful, and they are real. I do have one cautionary thing, that is end of Q1 was very weak, beginning of Q2 was weak. If I look at the first half, it gives a more sober picture of what the last six months have been, taking both of those into account. Then you come to different numbers like securities and commissions up 8% the first half this year compared to other. I think somewhere in between those two realities is probably where I think the current market stands. We will not get a real test of that until we have Q4. On Cum-Ex, I will just say that we are predominantly in the Cum-Cum. That is the withholding tax case. Of course, Cum-Ex, which is the criminal side of tax evasion, has been loosely linked, but it is not what we have been accused of or having as a predominant discussion, and I have no update. No news to report. Thank you. That is very clear. Maybe, if I may, just one final question. On the Swedish banking tax and the elections, anything we should be thinking about going into Q3 or Q4? Do you think we could potentially get a Swedish banking tax increase? I am not in a position to judge better than anyone. I think it is worth noting for all of you that the center and the center-left does speak quite frequently and loudly around financing the future budget, the government budget, through increased bank taxes. The number I have in my hand is another SEK 10 billion. Feasibility is a completely different matter, and I think it is not going to be that easy, but it is certainly something to have on the radar. If it is something to take into account in a more meaningful way in modeling, et cetera, I will leave up to you. Christoffer? Just to mention, Sofie, we have had the existing bank tax, as you know it is called the risk tax, has been challenged in EU court context. There is a debate around the existing risk tax at this point in time as well. Maybe on that, if you win or if the banks win that challenge, could you get any rebates or what happens if you win? It just gets canceled, or can you claim it back from the government? Well, theoretically, both can happen. You can have a tax being classified as unlawful and should be reversed. I would put that as a very low probability, even though it's technically possible. It's not something that we would consider. The more likely thing is that you would cancel it or amend it. All of those are possibilities. It's early days. It's early days. It's years away before we can conclude on the matter. Okay. That's very clear. Thank you. Thank you. We will now take the next question from the line of Namita Samtani from Barclays. Please go ahead. Morning. Thank you for taking my questions. My first question. Handelsbanken today disclosed the Swedish FSA has approved their new PD models for corporate exposures. Have you got any feedback from the FSA on your models? Can you remind us what your best guess is, i.e., do you expect a neutral impact from the Pillar 2 removal? My second question, do you have any updated thoughts on whether you think SEB can gain some benefit on the cost side or even from revenues from AI? Do you ultimately believe the benefits will go to customers? Thank you. Thanks for your questions, Namita. On your first question, I think the best update we have is the one we provided in Q2 of last year, where we showed you the update on the expected impact. We said that our models are under review in Sweden, and we're working to get them approved. We currently hold around 100 basis points Pillar 2 add-on for that IRB non-compliance. There's no further updates from that update we provided. On your second question on the cost outlook, yes, I think the opportunities here from the early assessments of our use cases within a number of areas of the bank is that there is good potential for efficiency gains. I think the discussion going on right now is, of course, to what extent those efficiency gains should be brought in terms of lower costs or to be able to do more business within the existing cost base. As far as revenue opportunities are concerned, I think that's where developments have been slower. Thus far, most of the use cases that we're looking at, primarily within customer service, we're looking at the credit process within mortgages. We're looking at financial crime prevention, and we're looking at software development in other areas. We're really looking at productivity gains and how those gains would be translating into bottom-line benefits. A little bit early, Namita, to see what the outcome will be, but a lot of promising developments across the bank. That's helpful. Thanks, Christoffer. I'll just make a guess. We have no indications that we are in a position to get this settled tomorrow. I am assuming, without any information other than what Christoffer just said, that this may take time. It's a long process to go through these model applications. Maybe it's a matter of sequencing, I don't know. Just so there's no expectations that this is going to come any day now from us. Yeah. Thanks, Johan. Thank you. We will now take the next question from the line of Martin Ekstedt from Handelsbanken. Please go ahead. Good morning. Thank you for taking my questions. I just wanted to focus away from the corporate side a little bit on the retail side. Just to reiterate, last quarter, you said that the retail banking transformation was centered on simplicity and speed, right? That mortgage margins remain below where you would like them to be. Looking at Q2, what KPIs have improved the most since then? Is it business conversion, approval times, new customer acquisition, cross-selling, et cetera? Have these improvements increased your willingness to compete for mortgage volumes in Sweden then at current pricing levels? Thank you. That's my first question. Thank you. No change in strategy. Simplicity, speed, and the correct priced product with customer happiness at the core is the strategy. We didn't have very little to show for in April. I did show a graph on the business pulse that this is the number one KPI. It's actually the amount of loans that are being granted, which clearly picked up. We don't know the market share yet. We'll see what the overall market did in June. Conversion is no meaningful change. Conversion is, of course, a number of how many applications or mortgage promises do you extend that then converts into real one. Volume is up. I think we're up close to 30% in the mortgage application side. If we compare it to ourselves, how we had it only a few quarters ago, it looks clearly better. We can also see that time to answer requests and time to provide an offer has also been reduced. That's the simplicity and speed. Leading indicators speaks to improvements. Still too early to say that it will have the meaningful effect that we desire to have. Margins continue to be squeezed. It's a tough market out there. Maybe coming back to Namita's question, this is one of the areas where we're also applying AI to improve speed and simplicity in the process. Okay, excellent. Thanks. For my second question, if I could focus on the cost base for 2026. You fine-tune your full- year cost guidance to SEK 33.3 billion today, looking at what you've delivered during the first half of the year, the cost base for the second half of the year would need to increase roughly 8% year-on-year to get to that. It grew only, say, 1% in Q2. It actually shrunk by 5% year-on-year in Q1. I just wanted to ask if you could go into some more detail on where this cost base that you're guiding for is coming from. I mean, salary inflation should not alone take you all the way there and so on. Yeah. Thank you. This is a development I was alluding to a little bit in my remarks. You're right to say that the trajectory that we're currently on is suggesting a lower level for the full- year than the full- year cost guidance. The full- year cost target with the adjustment we're making just because purely for FX, there's no other reason. The comments I just make is that typically, if you look historically, you will see that our second half cost base has been higher than the first half. There is a seasonality. There is an element of ramping up some of the investment areas that we've talked about, AI, resilience, and regulatory, that will have that effect. Bearing in mind, we have that SEK 250 million plus minus in the cost target. That can, of course, go both ways. To conclude, on your observation, we are in a good place, as I mentioned, we could come in below the target, but we're not making any changes to the target at this point. Okay. I'm referring to the growth rate, right, where you would have a significantly higher year-on-year growth rate in your cost base towards the latter quarters of the year than in the first. Perhaps, is that the natural evolution for you from one year to the next as well? That's more of how things have been unfolding with the consolidation of AirPlus and restructuring charges and other elements that could impact the year-on-year comparison. We're really focusing on the full- year total cost target that has an implied growth in it, which is an underlying growth rate of around 2%, excluding those developments related to the consolidation. Okay. Understood loud and clear. Thank you. Thank you. Thank you. We will now take the next question from the line of Shrey Srivastava from Citi. Please go ahead. Hi, thank you very much for taking my questions. Just one following up on the AI point and your shift to talking about sort of the cost of AI. How do you actually enforce this? Is it token restrictions for each employee or for specific businesses? We've seen a lot of banks talk about, including yourselves now, about the potential of AI in, for example, mortgage processing. You've been one of the first to talk about AI of the European banks. Can you provide any sort of concrete examples of where your token cost for a particular application has reduced significantly, just through trial and error? My second question is, if you look at the comment you made on the market valuations of non-core assets held within corporate investment banking, could you just give a little bit of detail on what exactly these assets are? Thank you. Yes. Thank you for your question. I think the broader point on the token reference that you're making, I think is that there's good reasons to expect the cost per token to go down. There's efficiency in models and there's efficiencies in the infrastructure as well that could drive costs of tokens lower. However, the number of tokens that is being used in the respective workloads is where we're seeing a big increase. That has been a rational development when the cost of tokens or AI compute has effectively been subsidized by the frontier labs to allow for rapid adoption. What we're putting in place now to your point, on your practical actions, those are the guardrails that I mentioned. Where we see token consumption exceeding certain levels, that triggers questions, that could be then the right use of tokens to your second question, we might say that in this particular instance, it actually makes sense, then we can follow up and monitor. It's making sure that we continuously follow the development and the cost of token consumption, considering that the cost now is going up and the cost of compute is increasingly being pushed onto us as enterprise users. Hopefully that gave some clarification around that. On the non-core assets, if you're referring to the development, the net other income, is that right? The SEK 300 million I referred to? Yes. I'm referring to that. Yeah. That is effectively attributable to a pledged asset that has been sitting on our balance sheet for a long time within CIB that is now being disposed. That's the effect of the net other operating income of over SEK 300 million. Okay. I'd say on non-core assets generally, I often think about it as the debt-to-equity conversion when companies fail. Normally, a loan is a loan. That's the normal course of business, but we also get assets in the CIB business that are not something that we have a business line, but we still can hold them for a long, long time because that's the way you minimize the loss given default, and you have a very good recovery strategy. We have the financial muscle, and that's kind of what I think predominantly is in there. Just to be clear, it is not the inventory. They are not core to the same extent, but the inventory of assets, we own financial assets all over the place. That's, of course, for the markets business. The non-core is when something gets transferred into typically an equity holding or similar, which we need to have in order to recoup our money. Good. Thank you very much. Thank you. We will now take the next question from the line of Riccardo Rovere from Mediobanca. Please go ahead. Thanks. Thanks, good morning to everybody. Couple of questions, if I may. The first one is on your buffer. The Baltic RWA add-on now is fully accounted for. You are also progressively releasing the amount of overlays, was SEK 1.3 billion, then SEK 1.1 billion, now is SEK 0.8 billion, which I interpreted as sort of you're seeing less and less risks in your business. The 250 basis points, do you think it could progressively move towards the mid of the range, 200 basis points, between 100 basis points and 300 basis points over time, given that it sounds that most of the risk seems to be somehow embedded in your thinking when you release overlays? The second question somehow related to that, a few weeks ago or days ago, we saw Bloomberg headlines about comments by Christoffer on possibly being interested in wealth management acquisitions. If you can elaborate a little bit on that. Is this a business you really want to invest? Maybe something where you could redeploy some capital at the expenses of buybacks or anything, or maybe just moving down the buffer to 200 basis points from 250 basis points. Thanks. Thank you, Riccardo. First on the buffer. I'll just make a very sweeping statement. We have the 100 basis point to 300 basis points. All the risks, the credit quality, regulatory shifts, business demand upticks, are all taken into account when we do capital planning and calibrate the buffer. There's nothing particular around this. As I can see around Europe, we're kind of ending up around this range. Practically speaking, it means you really have a desire to act if you're above 300 basis points in order to come down, which we've done several times over the last year. Of course, the opposite is also true. When you get closer to the 100 basis points, you need to devise a plan to shore up that you're not getting close to your minimum requirement. That being said, means that between 100 basis point and 300 basis points, just generally speaking, we're kind of on fairway. We let the bank live its life and it's business as usual, and then it will move around within that range. We consumed 44 basis points this quarter just from good lending growth. That is, of course, my dream, that that is the way that you would see the buffer being consumed for good reasons that generate high return on equity income in the future. That is more a hope. Very little stress on, if I may say so, in terms of targeting a particular level within the buffer. Let's see what happens. There's, of course, the number one reason for a buffer is also for unforeseen event. Business is a thing we really want to do, things happen all the time that you can't really control. On the other hand, I'll give you an absolute positive shout-out that the overlays have gone down, which is, of course, a sign, if anything, that the unquantifiable risks, the unidentified risks, are coming down. They are not to the same level as when COVID hit and the Ukraine war broke out, which is where we put some of those on, they have been replaced. The coverage of expected ECLs and total allowances is not meaning to change. We've earmarked it, we found places to identify it. We will not say no to any new business because of capital constraints. Right now it's really what we would use it for. I missed that Bloomberg news, I hand over to my CFO, and he can explain what this was all about. Yes, that's right, Riccardo. I think there was a reference to in which areas we would be considering non-organic growth. As we have said for some time, the one area that we could potentially be looking is within wealth and asset management to accelerate our growth. The WAM division accounts for about 15% of operating profit, as you know, in the division, in the group, and it's a proportion that we would like to grow. If there were anything in that space, that's the area we're looking. No news really from what the communication we've had previously with you, Riccardo. Thanks for that. Just a quick follow-up, Christoffer, on NII, if I may. When you mentioned SEK 100 million, if I'm not mistaken from Treasury, and you mentioned some SEK 100 million traffic between NII and NFI in the quarter. If I understand it correctly, these are volatile components, but not one-off components of your NII. Maybe the SEK 100 million can become SEK 50 million or maybe SEK 0, or maybe go to SEK 200 million. Those are volatile stuff, not by nature a one-off. Do I get it correctly? Yes, I think that's a correct representation, Riccardo. Okay, perfect. Thank you very much. Thank you. As a reminder, to ask a question, please press star one on one. We will now take the next question from the line of Jacob Kruse from Autonomous. Please go ahead. Hi. Thank you, Jacob from Autonomous. I guess two questions. Firstly, on the AI, you talked about how you are getting more aware of the potential cost of compute. Could you give us any kind of framing of what level of compute cost you see in a percentage term or hundreds of millions, or just what the range is on a sort of unsubsidized basis? Just what kind of numbers you're looking at. My other question was on the, I think a couple of years ago you set out on this strategic direction including Northern European corporate banking and the Nordic mid-corporate banking. Could you just update a bit on how much progress you've seen there, and what the sort of outlook is for initiatives in those areas? Thank you. Thank you, Jacob. It's going to be hard to give you detailed numbers on that. I think the point I would make is that one of the reasons that we've gone together with AstraZeneca, Ericsson, and [Solven], building our compute capabilities here that are within our control, is also cost perspective. We know what the cost will be to a great number. We will continue to work with the frontier labs and there's going to be use cases where that makes sense, and we'll continue to leverage on those impressive progresses. I think the point we're making is really that when the cost goes up, having control of that cost, either through monitoring closely from an ROI perspective or in the case of fiscal, we actually can control what comes from the cost of these communications. Too early to give you any detailed numbers on that, Jacob. Jacob, on the Northern European Bank, which is of course a symbolic, very important gesture as we call ourselves a Nordic bank for decades. I would say it like this is organic, we have not fallen for the constant temptation to buy a corporate investment bank to get things moving. It's a very cautious, slow-moving, 100% organic expansion that takes time. Think a decade before you know how you established. Just the normal loan refinancing cycle with averaging five-year RCFs, you need two shots, and that takes 10 years to try to get into a group or the core banking group for a large corporate in a new country. It costs very little other than the salaries for the people that are actually pursuing and advising clients and trying to, in competition, win. Going through it, Germany has done very well over the last three, four, five years, and we are establishing ourselves to a greater extent as a real international corporate bank. Investment banking, a little bit more humble around, we do not have the largest of ambitions to be an M&A and large scale ECM house in the Euro market. That's for other banks to do. As a corporate bank with investment banking capabilities is working very well. As I showed today, I think also we have improved quite a lot. We're number three now in the customer satisfaction. U.K. is medium and mature, we have a lot more to do. We've been doing that now for eight, nine years. No, a little bit more actually, 12 years. Then the new ones are Austria, Switzerland, and the Netherlands. I would say that the German-speaking part of that trio has done quite well. The Netherlands has been more slow, but we find now Netherlands to be happening. These are very small things. From a modeling perspective, I would be cautious. As a symbol, we opened up our office in Amsterdam a couple of months ago with a very nice little event. We had our first, call it 10 core clients attending. In the large corporate space, we are talking 20, 30, 40 very large companies that you would cover in these countries. They do help with the 1% income growth over time, more than the market otherwise would have provided, which over time becomes very powerful. We have this graph you might remember where we show everything since 2009 on the new clients that we've added since 2009, and they today represent a significant share of the income in CIB, and they certainly represent most of the growth. It would not have been at all that growth rate of a doubling of our business in CIB over the last decade if we wouldn't have added new clients to be covered. They do not come from Sweden. Here we are close to 100% covered. Was that answering your question? Perfect. Sorry. Yes, please. Thank you very much. Jacob, can I ask you, are you leaving Autonomous? I am. I am leaving Autonomous. Okay. This will be my final call with you in this capacity. Yeah, same on my side. I just want to thank you for the very good cooperation during the years, and I wish you best of luck in your new endeavors. Thank you very much. Thank you. We will now take the next question from the line of Riccardo Rovere from Mediobanca. Please go ahead. Thanks for taking my quick follow-up. Christoffer, you mentioned at some point that excluding the pension surplus, your ROE would actually look like 17.4%, if I'm not mistaken. I don't exactly remember the decimals. Is there anything you could do to, let's say, reduce this surplus and show, let's say, a better ROE on an accounting basis without this kind of adjustment? Yeah. The surplus is growing with the value of the assets, and this is helping us both in terms of lowering our annual pension costs, and of course, it's very comfortable to have a very sizable surplus. That said, we are, on an annual basis, evaluating regularly the possibility to upstream capital into the bank. The last couple of years, that has been around SEK 2 billion per annum, and previously to that it was around SEK 1 billion. As we've indicated, that could go up to around SEK 3 billion per annum. This will be subject to that annual assessment, the status of the surplus at the end of the year, and other parameters that goes into that. That is our possibility to evaluate that, and we'll continue to do that. Thanks. Thanks for that. Maybe similar to that, in previous calls you mentioned the possibilities of exploring SRTs. Any update on this? No update. Work continues. We want to be SRT ready as soon as possible, and we're doing the work to get there. Working on it? Yes. This is something that we're working on to prepare for, to be able to do it. Then, of course, it's another assessment, what type of portfolios or what type of exposures, timing, and rationale and financial evaluation, et cetera. It's to get the pipes in place to be able to do it. Correct me if I'm wrong, you have never done anything on SRTs so far. No. Correct me if I'm wrong. That's correct. Correct. Okay. Perfect. Thank you very much. Thanks. Thank you. Thank you. There are no further questions at this time. I would now like to turn the conference back to you, Johan Torgeby, for closing remarks. Okay. Thank you everyone for participating, and thank you for this semester. We, Team SEB, wish you a great summer break when time is appropriate to take that. Thank you very much for today. Thank you. Concludes today's conference call. Thank you for participating. You may now disconnect.