Good morning all, and a warm welcome to ABG Sundal Collier's Q1 results presentation. Before we kick off the presentation, I would like to mention that we will, as usual, have a Q&A session after the presentation. Should you want to raise a question, please use the Q&A function in Teams, and we will answer all the questions in turn. I am also joined today by my CFO, Geir Olsen. It is only 10 days since the first quarter ended, but it feels more like 10 weeks. We are in an unprecedented political situation with the U.S. President and his administration acting more unpredictable than predicted, causing turmoil in the markets. Yesterday evening, a tweet from Trump caused the biggest sigh of relief in the markets seen in a long time. That is good. Potentially, it can lead to markets reverting to pricing assets based on fundamentals again.
Honestly, trying to predict the next political move or the next tweet, setting the scene for short-term market performance up or down, is not a very productive strategy, we think. Instead of guessworking the next move, we stay our course to focus on what we can influence rather than what we cannot. What we can influence is how we deal with different market conditions and how we assist our clients during these circumstances. Our focus on providing the best advice and execution to our clients is even more important in volatile markets. I firmly believe that the value of our independent advice, without potential conflicts of interest from other business activities with clients, such as balance sheet lending or providing investment advice based on having own asset management and mutual funds internally, etc., has increased as of late.
The value of independent, clear, and 100% unbiased advice when it comes to wealth management cannot be stressed enough. As such, we are pleased to announce we have now started onboarding our first advisor private banking clients, and we look forward to launching our offering to a broader audience in the coming weeks and months. We are now the only Nordic independent investment bank with private banking services that provides our clients not only with all the knowledge and the IDs from our investment bank, but also with 100% unbiased wealth advisory services based on what's best for the client, not for us. While the current market turmoil has reduced the short-term visibility on our strong transaction pipeline, we are confident in our ability to adapt to new circumstances. This is not just a nice slogan.
It's a statement that is backed by our track record of 95 consecutive quarters of operating profits. We will continue to cater for our clients' needs and assist them in reaching their targets, so be it potentially in other forms than initially envisaged. We also believe that the current volatile markets also will provide us and our clients with new opportunities. With those initial comments, let's have a look at the actual numbers for and performance during the first quarter. Starting off, looking at our revenues, our top line was up from NOK 403 million to NOK 407 million in the quarter. Not the biggest increase on record, but still it proves resilience and stability in a market with some clear strengths as well as some clear weaknesses.
We had strong contribution from our debt capital markets as credit spreads stayed low during the quarter, as well as good contribution to growth from our brokerage operations. M&A was more in line with recent first quarters, whereas volumes in the ECM space continued to be muted overall. I'll revert to the segments later on. Our operating margin in the quarter ended up at 15% with limited top line growth. The margin was negatively impacted by a continued slight creep in general cost inflation, combined with growth in number of people in line with our strategy. Also bear in mind that excluding new business initiatives, with the main one being the recently mentioned private banking operations, our operating margin would have been 3.7 percentage points higher. Our target is clear that private banking will contribute to improving margins, even though it will take some time to get there.
Net profit ended up at NOK 50 million versus NOK 56 million in the first quarter year on year, and earnings per share at NOK 0.09 in the first quarter this year from NOK 0.11 last year. With that, over to the next slide and looking at what is on top of everybody's mind these days, the macro and the macro backdrop. In conjunction with our Q4 results presentation in February, we talked about that we had started to see a bit of a reversal of capital flows coming back from U.S. equities, U.S. equity index funds, back to Europe and the Nordics in Q1. This continued up until a couple of weeks ago, but obviously, we could expect a bit of a hiccup in that positive trend given the brutal sell-off across asset classes over the last week.
For the first time since the pandemic outbreak back in 2020, the volatility index hit above 50, and this is the third highest reading since the financial crisis back in 2008, which highlights the magnitude of the uncertainty in markets. After the 90 days pause in tariffs announced yesterday by Trump, markets rallied and the VIX came back to the mid-30s. Still elevated and a sign that markets are still very sensitive and nervous, but not the same panic as seen over the last week. On interest rates, we have seen in the very sort of recent times, last week or so, long-term interest rates in the US increasing sharply the last few days, in contrast to what probably you initially would have expected from a more muted growth outlook on the back of the proposed tariffs.
The auction yesterday on U.S. treasuries, combined with Trump's statement, the 90-day pause in tariffs, made rates come back a bit, but still elevated from levels seen last week. If the intention by the U.S. administration was to put pressure on the long-term U.S. interest rates by increasing tariffs, it seems to have been less successful so far. U.S. might have a trade deficit in terms of goods, but not in terms of capital, i.e., dollars, which underlines the fact that the reality is always more dynamic than the theory. Corporate credit spreads have also widened over the last week, but still well below previous peaks, which could mean that the activity in the debt market could recover rather quickly should markets start to stabilize over the next few weeks or so.
Let's continue with the next slide and look at how the different segments within our or markets within our investment banking operations have performed. Starting off with the Nordic equity capital markets, it's clear that, save for a couple of large, two large IPOs in Sweden, volumes have been rather muted in the quarter, also before the recent turmoil. The debt capital market, on the other hand, has continued to be very vibrant and with primary volumes up by more than 107% in the quarter year on year. It is noticeable that the Nordic debt capital market has continued to attract non-Nordic issuers, and even though markets might be difficult short term, we expect that trend to continue.
Finally, looking at the M&A market, that continues to be stable, but with a delay in the expected uptick in M&A activity, with US volumes being reported at decade lows, while corresponding Nordic numbers have held up reasonably well. On the back of our own pipeline, we still expect M&A activity to improve once the market stabilizes, combined obviously with avoidance of a prolonged period of instability, of course. Let's continue on the next slide, looking at our performance in these markets, starting off with our corporate financing operations, where we did okay in some with more limited contribution from ECM equity capital markets this specific quarter and strong contribution from debt capital markets, ending up in Q1 revenues very stable at NOK 122 million.
As you can see on the right-hand side of this slide, there's a pretty good contribution from geographies as well as sectors in our combined capital markets operations, highlighting the relative stability in our operations. Moving on to the next slide, please, and looking at our M&A business operations during the quarter, our long-term trend continues to be rock solid. As always, there's a bit of lumpiness looking at single quarters, but our Q1 revenues are pretty much bang in line with a five-year Q1 average. As you can see on the transactions on the right-hand side of the slide, there's also a wide range of different sectors represented within M&A, including shipping, energy, industrials, TMT, real estate, etc.
As previously mentioned, our M&A pipeline has been building well over the last couple of quarters, even though we obviously have to be humble for short-term visibility also within M&A due to the recent market turmoil. Finally, let's move on looking at brokerage and research, a segment that traditionally has been one of our more cyclical operations, but the last few years it more resembles a kind of a recurring revenue business with revenues very stable around NOK 565 million. As mentioned in the previous couple of quarters, we have seen growth resuming.
The performance in the first quarter with revenues growing by 12% to NOK 171 million, mainly with strong contribution from our equity sales desks, not least from our Norwegian desk, actually is the best first quarter since the financial crisis 16 plus years ago. It also means that we are well positioned to break our 2021 numbers. With that, I'd like to leave the word over to Geir to talk about headcount and costs. Please go ahead.
Thank you, Jonas. Q1 average headcount was up 4% year over year from 333 to 347, but the number in Q1 is in line with the numbers we had in previous quarters. However, at the quarter end, the number is just below 340, which is then in line with the last four quarter average. Growth is mainly within investment banking, and this is part of our strategy, while also research and support operations are flat. We maintain a slim operation and focus on growing our front businesses. If we flip to the operating costs, we see that we have a slight increase overall.
We have the compensation costs being in line with last year at NOK 230 million in spite of the increase in average headcount. You see that the total compensation revenue ratio is in line with the levels we have seen in recent years at around 57%. The increase mainly stems from increase in non-compensation costs. They are up year over year, but at the same level as we have seen the last two quarters prior to Q1. When comparing to Q1 last year, the increase is a combination of several factors. Major fixed cost items such as rent and IT infrastructure are primarily driven by inflation and sort of KPI price increase, while we also have some impact of the weakening of the Norwegian krone.
Also, we note some slight increase in activity-driven costs such as exchange costs as we have higher trading volumes, but we also have some costs of a more non-recurring nature, some of which being related to the startup of the new business initiatives, as Jonas mentioned earlier. That was pretty much what I had to say on costs. Jonas, back to you for wrapping up.
Thank you. Thank you, Geir. Thank you, Geir. Okay, let me summarize the key what we think are the key takeaways here. We delivered a stable first quarter with a strong contribution from DCM debt capital markets and our brokerage operations, resulting in stable revenues. We are very happy to have onboarded our first private banking clients, and we look forward to launching our offering to a broader audience in the coming weeks and months.
We are thrilled about building a very strong offering and position in the private banking market as the only independent Nordic investment bank offering those services. Needless to say, the current market turmoil reduces short-term visibility. However, we are very confident in our ability to adapt to new market conditions, as witnessed by our track record of 95 consecutive quarters of operating profitability regardless of market conditions. We are committed to providing unbiased and clear advice to our clients coupled with best-in-class execution, a service that we strongly believe is more appreciated by our clients and potential clients than ever. With that, I thought that we leave the floor open for any questions.
We have received one question on private banking. You mentioned that you have started to onboard new clients. How does the current market situation affect the upcoming private banking launch?
That's a good question. One might think that it's bad luck launching a new product or service in the midst of this market turmoil. In fact, we think timing could not have been better. Clear and best-in-class advice is always important, but we think that this is a reminder of the importance of unbiased advice on top of that. Unbiased, such as not having our own funds, for instance, mutual funds, meaning we have no incentives to sell our own products, such as many of our competitors out there. We see strong interest from potential clients for our services.
No further questions from the floor.
Okay. Crystal clear in what is less than crystal clear markets, but as you can see, we are staying our course and looking forward to interact and communicate with the market and investors in due course and focused on delivering good services and good returns to shareholders. Thank you so much.