Hello everyone, and good morning. Welcome to the presentation of the fourth quarter results for DNB, and also for the full year 2023. We will be taking questions after the presentation, and members of the press, you will be able to talk one-to-one with the management after this session outside. Unlike Liverpool manager Jürgen Klopp, our manager is full of energy and ready to present the highlights for the fourth quarter. Give a warm welcome to Kjerstin Braathen, CEO of DNB.
Thank you very much, Even, and it's cold outside, but a very warm welcome to you, those of you who are here, and also those of you following us on the web for the presentation of our fourth quarter results, but also our full year results for the year 2023. A year that I'm sure you would agree with me, turned out to be something very different than the most of us thought when we were at this time a year ago. But also certainly a year where the Norwegian economy, as well as our business model, has continued to show its resilience, and, I'm proud of the collective efforts of our team that has contributed to what I would call very strong results for the year across the group.
Since we are at the beginning of a new year, I will take you through a couple of the highlights from the full year that we've just left behind us. I will talk about the macroeconomic outlook, and also certain growth trends that we believe that we can build further on in the future. A very strong performance in 2023, where we deliver on all our financial ambitions. We have a strong growth in our top line of 23.5%, driven by profitable growth across the business, increasing rates, but also record high income in the capital light area, fees and commissions. We delivered 2% growth in lending, 1.7% growth in deposits.
This is slightly below our longer term guiding of 3%-4% on an average basis annually, due to a gradually lower economic activity and credit demand throughout the year. A relatively stable development for volumes in the personal customers. In corporate customers, lending grew by 3.8% and deposit by 3.6% for the year. We've seen an all-time high revenue for fees and commissions that grows by 7.6% compared to 2022. This is well above our guided average annually of 4%-5%, and represented by solid contribution and growth across many of the product areas in the capital light part of the business.
Earnings per share up by more than 18% compared to the previous year, and return on equity for the year, 15.9%, well above our minimum targeted level of 13%. In addition to a resilient earnings platform, a key pillar to our strategy is a rock-solid balance sheet. We end the year now with a Core Equity ratio of 18.2%. This provides us with 140 basis points headroom towards the required and expected level, and gives us ample room to support our customers in their future growth ambitions. We have conservative risk weights, which is clearly visible when you look at our leverage ratio, that at the end of the year is 7.5%, excluding central bank deposits.
So all-time high earnings per share and a rock-solid balance sheet supports a dividend of NOK 16 per share that the board intends to propose to the General Assembly. This is an increase of NOK 3.5 per share, compared to the dividend that was proposed for 2022. We reiterate our dividend policy in full, including our ambition to pay an increased nominal sum per share per year. We have further also made the first capital repayment during the fourth quarter from our life insurance business. This is enabled by a strong solvency ratio of 248%, and the fact that our guaranteed obligations have topped out and are now on the way down. The dividend from the annual result in the life insurance company will be paid during the first quarter.
We are in DNB, highly motivated by the role we play in society at large, and we are even further motivated by acknowledging that 50% of the dividend we distribute goes back to the Norwegian society. Among that, NOK 2 billion to our third largest owner, Sparebankstiftelsen DNB, for them to distribute to national and local initiatives across all of Norway. Over to the macroeconomy. We expect the Norwegian economy to see a soft landing in 2024. We have seen growth slowing down gradually throughout the year, and we expect the GDP to land at 1% for 2023. We expect a slower start to the year and for the economy to land softly in 2024, with a GDP growth of 0.6% before gradually picking up again after that.
We expect corporate investments to continue to be a key driver for economic growth ahead of us. We can continue to see differences between various industries, where companies active in the construction area or retail trade have a tougher environment. Anything related to energy, maritime, and the servicing industry is performing very well. Inflation has started to come down. A headline inflation of 5.5% expected to gradually move towards 4% towards the end of the year. We believe that rates have now topped out with a key policy rate of 4.5%. Rates are expected to stay at this level for the most part of the year, with the first rate reduction expected to come either in September or December later this year.
With the year impacted by geopolitical risk and conflicts around the world, we find it also opportune to remind you that, in general, the uncertainty around us is higher than normal. No doubt, a number of households in Norway continues to feel the strain of now more than two years of increasing prices and increasing rates. All the same, we continue to see a strong resilience and good financial health, in the Norwegian households overall. And as we've said many times, the most important factor for social and economic wealth in Norway is the fact that people have a job. Unemployment remains very low, 1.9%, expected to gradually tick up towards 2.8%, but still a level that we would call low if we look at, countries around us and, over a period of time in history.
We've also showed on several occasions how the development in the servicing burden of debt to households is developing in an environment with increasing rates. You can see from the middle part of the graph that it has increased much more if we look at interest rate servicing only, and much less if we consider the debt servicing burden, including installments. It was at 13.7 during the pandemic, with a key policy rate of zero , now expected to top out at 16.9%. A meaningful increase, but still not at a level that is considered a threat or unhealthy for the economy overall. You do know that most Norwegian, the Norwegians have a culture for paying installments, and this dampens the magnitude of increased burden in the environment that we have been in.
Furthermore, what matters to people is how much purchasing power and flexibility they have in their economy. We are leaving behind us a year with a negative development in real wages, and most expect for 2024 to be a year where, on average, people will see a growth in their wage, which is a strong contribution to the scenario indicating a soft landing in the economy. So all in all, an economy that has slowed down, but a very sound underlying sentiment, I would say, for our business going forward. Now, we very often highlight the importance of the Norwegian economy to our business, and the Norwegian economy is very important to our business, but so is also our strategy and our ability to deliver on our strategic initiatives.
We grow our book in a diversified manner across both segments and geography, and longer term, as you know, we guide for a growth in loans and deposits by 3%-4% annually. As you can see on the right-hand side, we have delivered on this. Further amplified by the acquisition of Sbanken and also extraordinary growth in deposits during the pandemic. For the past 5 years, the average annual growth on the lending side is slightly above 5%, and the same number on the deposit side, slightly above 10%. Our platform for future growth is solid. We have clear lead positions across all of Norway, with 30% of individuals using our mobile platform, our mobile banking platform, and we bank 1 out of 3 businesses across all of Norway.
Buying Sbanken has been an important transaction for us to broaden and improve our offering to our personal customers. As you can see, in the while prior to the acquisition, Sbanken struggled on a standalone basis to deliver growth. With the focus... With the ability to sharpen their focus, even further on their customers, we are very pleased to see that they, in the past two years, have delivered an average growth of more than 10% if we look at lending.
Beyond our positions in Norway, we have important international positions. We are increasingly growing our presence across industries in the Nordics, and beyond that, we have global activity within key industries that are in growing trends. Energy with renewable and infrastructure, seafood delivering food to the world, healthcare, and also the maritime business. In a period where the Norwegian economy is expected to grow somewhat slower, we increasingly expect to leverage on growth opportunities from these international positions.
We do expect a lower growth for the first half this year, but over time, we reiterate our guiding, where we say that we will be able to grow 3%-4% on an annual basis. Also, for a while, we have been talking to you about how we invest to improve and build value for our customers in the savings and investments space. This is an area that is driven by long-term growth, pension reforms, and the need for individuals to further save for their requirements. Savings and investments is a strategically important area for us, and we have built market-leading positions across several areas in this space.
We are one of the market leaders offering pension agreements to corporates, with a market share of 28.6%. We are the largest asset managers in Norway, with assets under management closing in on NOK 950 billion. For the past five, six years, we've built the leading digital savings app for the Norwegian market. We have prioritized sectors with capital that we would call sticky and recurring revenue. In the middle illustration here, you can see the amounts that we have or the assets that we have under management from our defined contribution pension, retail savings, which primarily is under saving schemes, and also the amounts that are discretionally, discretionarily mandate, discretionarily managed in our wealth management business. These three area grows gradually every month.
A new payment is done under the saving schemes by each individual. New payments are done by corporates for all of their employees every month. If we add to those increased payment flows, a normalized return, these bulk of assets will grow in the period forward by NOK 30 billion a year. So these are sticky and growing volumes ahead of us. Our overall guiding for growth in fees and commissions is 4%-5% per year. Now, we have pointed to certain areas that we expect to grow faster than this, and savings and investments is one of these areas. And as you can see to the far right, for the past 5 years, this area has been growing on an average basis annually by 12.8%.
Another area that we have pointed to for faster growth than the average is our markets business and investment banking. DNB Markets has become an increasingly important part of our business. We have a global footprint, but no doubt also we have a unique leading position in Norway and gradually strengthening our positions across the Nordics. 2023 has been an active year, with record bond activities towards the end of the year, and also a strong year throughout in our FICC business. And we believe a year that demonstrates the strength of having a diversified platform of products and industries.
We often talk about the importance of the customer revenue in DNB Markets, and I also wanted to show you that in parallel with the growing market business, there's been a transformation in the business model, where an increasing share of the revenue in this business comes from customers. This is the business that is hard to get. It requires top competence, top people, and an ability to cooperate across the lead positions we have in the group. This business will always, in some ways, be dependent on the state of the capital markets, and they are by nature, as you well know, volatile. Even so, we have highlighted over time that we do benefit from an increasingly diverse sector of both products and services, as well as industry expertise.
You can see that in the past five years, we have been able to deliver a growth of 8.6% in this area. Success in this business over time can only be achieved by aiming higher in terms of what we deliver of customer value in a competitive but rational market. We have for years invested to improve our customer offering. I talked about 30% of Norwegians using our mobile banking app. That is very highly rated by those who use it. We now also have more than 30% of our business clients on a digital mobile app, and as many as 20% of them visit the app every day. We substantially invest in the security of our customers and also cybersecurity to continue to deliver safety and earn their trust.
We have large investments every year, and have invested several hundred million NOK in the past few years to strengthen our defense and support for customers in this area. We also firmly believe that we need to fight for our customers and for them to choose us every day. They shouldn't decide to stay with us because it's a hassle to swap. They should choose us because it's worth it. That reasoning is part of why we have also been instrumental in taking part in the industry's efforts to make it ever easier to swap your bank relationship in Norway. You can do it fully digitally using the BankID app, and your products and services can also be digitally transferred to another supplier.
We believe this is part of the reason why Norwegians actually change their banking relationship five times more often than what we see in our neighboring countries in the Nordics. The Norwegian market is highly digitized. A large part of our customers are mainly digital, and this, alongside other efforts, has enabled us to maintain the lead position in terms of cost efficiency across Europe. An efficient, robust, and profitable business should benefit owners, but it should also benefit customers, and we are pleased to see in recent reports that have been issued several proof points that Norwegians in general benefit from attractive prices on financial services. Here, specifically demonstrated by the prices on lending compared to other Nordic countries. So all in all, this, we think, provides a solid platform to grow and create value in our business going forward.
Now, back to the quarter and the new information of the day, and I'll leave you with some highlights before leaving the floor to Ida. The fourth quarter is also a strong quarter in the year, with a return on equity of 14.6%. Our net interest income up by 1.8%, driven by higher interest rates and volumes developing relatively flat in the quarter. A strong point we would highlight is net commission and fees, a solid uptick of 8.1%.
They are strong across several product areas, among them investment banking and asset management. We recognize losses of NOK 920 million this quarter. Overall, a robust and diversified portfolio, where we see no structural or industrial shifts that we highlight to you going forward. Again, solid capital ratio, 18.2, 140 basis points headroom towards expected and required level. Earnings per share also for the quarter up by a little more than 18% compared to the same quarter last year. So with that, Ida, I'll leave it to you to take it from there.
Thank you, Kjerstin, and good morning, everyone. I would now like to take you through the quarterly results in a bit more detail. Loan volumes are affected by a general, lower market activity, and are down by 0.5% in both customer segments. Deposit volumes were overall down by 0.3%. In the personal customer segment, we noted a decrease of 1.3%, while we saw a corporate customer uptick by 0.4%, currency adjusted. We maintain a strong deposit-to-loan ratio in the quarter, and by the year-end of 74.9%. Net interest margin was up by 3 basis points, now amounting to 190 basis points. The combined spreads in the customer segment was up 4 basis points.
This includes the full effects of the repricings announced in August and the partial effects from the repricings being implemented end of October and end of November, respectively. The Norwegian Central Bank raised the key policy rate by 25 basis points in December. Following this increase, we announced a repricing with effect from end of February. As for previous repricings, this gives lag effects, which means that there is a temporary reduction in lending spreads and temporary increases in deposit spreads.
Net interest income increased by NOK 279 million, up 1.8% from the previous quarter. The effect in change in spreads, treasury effects from internal allocation and interest on equity amounted to NOK 406 million. In the quarter, FX positively impacted NII by NOK 68 million, while volumes negatively impacted NII by NOK 90 million. As signaled in the third quarter, we have seen a tapering effect compared to previous repricings. We do, however, still note material positive effects from the announced repricings, providing a tailwind effect moving into 2024.
Let us turn to commission and fees, where we continue to see a strong contribution from most product areas, supported by good and healthy activity among our customers. Net commission and fees are at NOK 2.9 billion, up 8.1% from the corresponding quarter last year, reflecting strong performance across the product areas, as you can see from this slide. The result from real estate broking was down 9.7%, very natural, bearing in mind the lower market activity we are noting.
Investment banking was up 27%, driven by an all-time high debt capital markets activity, as well as a strong quarter for M&A. Asset management and custodial services were up 12%. As Kjerstin pointed to, we have an all-time high result in asset management, assets under management as well, at NOK 945 billion. This is driven by both positive market developments, as well as net inflows from both institutional as well as retail customers. The fourth quarter was also positively impacted by performance fees of NOK 238 million.
Our customers stay committed to the long-term saving schemes, and as shown by Kjerstin's presentation, we also note a positive development in terms of number of savings agreements, as well as the amount they save on a monthly basis. Guarantee commission was up 11.5%, reflecting a strong demand for trade finance products. Money transfer and banking services were down 2.3%, but still at very high levels compared to the pre-pandemic levels we noted.
Development year on year is driven by a lower international traveling activity this quarter. Sale of insurance products are up 1.7%, with positive development in non-guaranteed pension. Moving on to costs. Operating expenses are up by NOK 845 million, reflecting a seasonally high activity level. IT expenses were up by NOK 223 million, driven by increased activity, as well as higher license and supplier costs. Seasonally high activity level, combined with a strong result, led to an increase of NOK 200 million in activity-related costs. Higher return on the closed defined benefit scheme drove pension expenses this quarter by NOK 170 million.
But please bear in mind that this pension scheme is partly hedged, and therefore you can find a gain is recognized in net gains and financial instruments. Fixed salaries were up NOK 97 million, and fees and other expenses up NOK 131 million. FX impacts expenses by NOK 46 million in the quarter, and we also have a non-recurring item of around NOK 80 million this quarter. Now, moving to the portfolio quality, which remains robust and well-diversified, with 99.2% of the portfolio in stages one and two. The personal customer portfolio, which accounts for more than 50% of our overall exposure at default, remains strong.
Our customers continue to be in dialogue with us, but then in particular, related to increased costs overall, as well as how to manage increased interest rates. We do not see a negative development to note in the portfolio, and while we have seen a modest uptick in request for interest-only periods and past due payments, we are still at historically low levels. For the corporate customers, impairments provision total NOK 803 million. The portfolio remains robust and well-diversified. There is no structural change in the portfolio or general negative migration to note. The impairments in corporate banking in stage three is related to customer-specific situations in large corporates and SMEs, operating in industries that are more sensitive to higher interest rates, lower construction activity, as well as lower consumption overall.
The commercial real estate portfolio remains robust, with 74% in low risk, 94% of the exposure being in Norway. For office premises, which accounts for 40% of the commercial real estate portfolio, we note a strong ability to adjust rental prices in line with CPI. Vacancy levels also remains low, supported by the low unemployment levels that we are seeing. We remain close to our customers and are proactively advising them on how to handle higher interest rates and the overall macroeconomic developments. which has also been evidenced by the strong FICC income we saw in the quarter, and then in particular, in relation to interest rates hedging.
We remain comfortable with the credit portfolio and the quality in the credit portfolio, but please bear in mind that losses will vary from quarter to quarter, and that the uncertainty related to customer-specific events has increased. Now, moving on to capital. Our Core Tier 1 capital remains strong at 18.2%, and as Kjerstin pointed to, 140 basis points above the regulatory expectation, which was shifted as we received the SREP in December, moving from an expectation of 17.2 to 16.8 now.
A solid profit generation in the quarter contributed to strengthen the core Tier 1 capital ratio by 30 basis points. The board has proposed to pay to the Annual General Assembly, paying out a dividend of 16 NOK, which represents a payout ratio of 63%. The updated guidance from the NFSA that we received in the third quarter meant that we changed practice related to retained earnings from 50% to now being the average of the past three years.
The payout ratio proposed for 2023 is lower, which means that we now have a reversal of 10 basis points this quarter. Retained earnings in the core Tier 1 capital ratio for the quarters in 2024, being the average of the past three years, as is now 38%. This should not be seen as a guidance for future cash dividends, but is purely a change in reporting practice. The repayment of the excess capital from DNB Life of NOK 1 billion adds a further 10 basis points to the core Tier 1 capital ratio.
The ordinary dividend of NOK 887 million will come in the first quarter. The buyback program of 0.75% of outstanding shares that was announced in December is still ongoing, is expected to be finalized in March, and reduces the core Tier 1 capital ratio by 20 basis points. Higher income over the past three years leads to an annual adjustment in risk exposure amount related to operational risk. This gives a decrease in the core Tier 1 capital ratio of 30 basis points. With a core Tier 1 capital ratio of 18.2% and a leverage ratio of 6.8%, our capital position remains strong, and it also enables us to deliver on our dividend policy. With that, I would like to thank you for your attention.
Thank you so much, Ida and Kjerstin, for the presentation. We will now open up for questions, and I'll ask you to wait for the microphone to arrive, for those who are watching, the stream, and we'll start with, Vegard from Pareto.
Thank you. In the news yesterday and in the presentation today, you focused on the good traction you have with the, with Sbanken and the concept there. Could you discuss that a little for us, in contrast to some of the news stories with unhappy customers, and also in relation to the market shares, which in the supplementary information seems to be falling 0.7% or from January to November last year?
Certainly, we have noted that there is a lot of interest in Sbanken, and thinks it's wonderful that people are engaged in banking activity and banking in general. Of course, we also have noted that some people are not happy with some of the changes that naturally come after an acquisition. But also wanted to show you the development in the numbers here today, because not everyone is speaking through the newspapers.
So we are maintaining the brand and the customer offering, but we will also integrate and take out some of the synergies, and in that, there will be certain changes. Certain changes that probably would have happened whether we had acquired Sbanken or not. Our focus is to be close to the customers. We are firmly committed and strongly believe that we will be able to deliver an even better offering, being jointly Sbanken and DNB to our customers going forward.
And overall, I would say we're encouraged by the development that we've seen over time. But we pay attention, and listen, and work hard every day to communicate and develop what we believe our customers would like. With relation to market share, I suppose you speak about the larger personal customer market share across the group. And we have been in a market with a lot of changes, increasing rates, and slowing demand, and a market that is more characterized by a low number of transactions of people buying homes and more so by people moving around.
We tend to be stronger in the first sector, where people are buying a new home or a new apartment. Our ambition will always be to grow as closely to our market share as possible, but we also have a key priority on profitability. What we see from the base of our customers as well, is that many, rationally so, use their excess cash to repay on their loans. But longer term, we intend to grow as close to our market share as we can.
So you can't read from those numbers that there's some cannibalization of moving from the DNB concept.
Not material, no.
No. Okay, thank you. And the second question on the life capital management now, since you have repaid in Q4, is this something we should expect in Q4's going forward? Or with a very strong solvency, is this a quarterly assessment you're making? How should we view that compared to the annual dividend that comes in Q1?
Well, I think firstly, you should note the very, very strong capitalization in the life insurance business, with 248% solvency, which indicates a comfort that we should be able to distribute 100% of the result on an annual basis going forward. With regards to the payout of capital, this is a process where we do rely on an approval from the FSA. I think it's a strong signal that we now have done it for the first time. There is more potential over time, but I think you need to expect that this will happen gradually and over time. But indicating that on an annual basis, you could be able to expect a similar amount to what you've seen for 2023 would not be unrealistic in our view. But again, we do rely on approval from the FSA on this.
Okay, thank you.
Johan Strøm, Carnegie.
Thank you very much, Even. I'll continue on the same topic, loan growth. So this 3%-4% target, just curious to hear, to hear you talk about the importance for that in the short term as well. So the profitability is way above the 13% return on equity target, but growth is very low. It's in fact declining quarter-over-quarter in the mortgage market. So just curious there, if you are willing to compromise a little bit of profitability to gain back some of the volumes? That's my first question. And secondly, on the same topic, are you seeing a higher pace of mortgage repayments at the moment?
We.
Then finally, if we can just squeeze in on the CET1 ratio, the target, the 16.8% FSA expectation. You wanna have a buffer or a headroom to that. Can you quantify that number?
I'll leave the last one to you.
Thank you.
Gosh, you had so many questions now, Johan. But, the growth. We work very hard in the market every day, and we do see an accelerated repayment, as I also pointed to earlier, from our customers on debt, which is rational, I would say, in today's market. And there is a substantial reduction in credit demand that is impacting these numbers. Now, 0.5% down in the quarter is not material, I would qualify, in this market. I would actually call that relatively stable volumes. And we are focused on performance over time, but also sustainability in the business model, so that you know that we are disciplined with regards to both growth and profitability.
It's difficult to give you a very granular further detail on our thinking on this, but I think over time, we also represent that we believe we have a solid platform for growth. Increasingly now, in the short term, we expect to leverage on our international positions, and over time, we believe that we can deliver 3%-4%. We had a lower growth in 2022, still a very decent development of the business overall. We pay attention then, both gradually and of course, to our strategic positions, and have, and continue to have a very clear market-leading role in Norway, both when it comes to personal customers and SMEs, and we expect to continue to have that. For SMEs, we also continue to take market share even in 2022.
When it comes to the capital position, as you know, we don't quantify the buffer. You're right in saying that what we have said is that we would like to have a bit of a buffer to also manage profitable loan growth ahead, as well as FX fluctuations. As you know, we also have a Pillar 2 guidance of 125 basis points included in the 16.8, which is significantly higher than our Nordic peers.
Thank you.
Next question, or yeah, from Thomas Svendsen , SEB. You can just, Andreas has the. Yeah, okay.
Yes. Does it work? Yeah.
Yeah.
Yes. Good morning. So, question on the deposit volumes. On the corporates, it's up quarter-over-quarter and down on retail or personal clients. Could you describe a little bit difference on the dynamics there? And also on the personal side, would you expect it to continue to decline, or will you do something?
Well, the latter is a difficult question. Bear in mind that if you compare our deposit volumes compared to prior to the pandemic, as I've shown, we've had, we've had 10% growth over the in average over the past five years. So our deposit base, last time I checked, for personal customers, it had grown by 40% since prior to the pandemic. So I think it's been more sticky even than, than we expected at, at the time.
So I would still qualify the volumes we see today as, as relatively stable. I think one important factor to pay attention to is that the fact that people continue or use some of their savings and reserves to enable the soft landing in the economy, that rhymes with a, with a more stable development in deposits. You should also keep in mind that most people expect a growth in real wages again from this year, and a longer-term expected growth in the saving rates that actually surpasses GDP growth, driven by the trends that I spoke about in related to pension and the need to save for for retirement.
So there is a sentiment for further growth, I would say, also on the deposit side. Corporate banking, the dynamics are very different. There can be single customers with very large deposits. We've seen that with our very strong credit quality and robust balance sheet overall. Also, international customers are increasingly bringing their deposits to us to find a safe space. We also have seen that over the past years, we've been tremendously successful in winning mandates for communes and local municipalities in Norway, and they're typically rich on deposits.
I'm also very pleased to say that we don't win them on having the best deposit margins, but we actually win them on having the best technical solutions that they depend on. So there are movements, but you can have larger shifts in corporate banking without it necessarily impacting the margins, whereas personal customers, more gradual. But still, our deposit-to-loan ratio, that was close to 60% prior to the pandemic, today is at 74.5. So there has been a-
Nine.
74.9%.
Sorry.
So there has been a shift, clearly, that remains with a higher deposit level.
Second question, on the residential brokerage fees, real estate brokerage, it's lower now than Q4 last year, and even much more lower than Q4 2021.
Yep.
Could you explain what's going on there?
Yeah. This is the market. And if you were to look at the details in the market, it should have been even lower. But it's been a challenging time where we have talked about, for a while, losing also some market share in the real estate brokerage, part. Now we're actually starting to gain it back. We believe it's the beginning of a, of a better, period, but it's kind of disguised by the fact that there are fewer and fewer transactions in the property market. But all in all, this is actually, relatively speaking, a better result than fourth quarter last year or the year before.
Thank you.
Next question from Jan Erik Gjerland in ABG.
Thank you. I have a couple of questions as well, starting with Sbanken and the DNB brand on the household side. If you take the NOK 6 billion, is that end-to-end, or is it average to average? Just to start with that, so we understand what kind of NOK 6 billion you gained on the Sbanken last year, the volume. Do you think that's... Is that an average number or is it an end number?
I would have to come back to you.
Because if it's an end number, it's you lost NOK 3.6 billion on the household, on the retail side, and personal banking in DNB. So how should you read your sort of efforts to regain that market share in DNB brand, as you have had success with Sbanken brand?
Well, I would think of it completely in the opposite way around, and I think I talked to it in quite detail on Johan's question, that we believe adding Sbanken is a strength. And yes, it's clear in our numbers that Sbanken has been performing better than the DNB brand in the recent period, which is natural because they're a much stronger brand in banks, in the bank swapping market, whereas the DNB brand is a stronger name in the change of housing market. We've also seen a slight higher repayment activity in the DNB brand. But we see these two brands as being complementary and as a strength to our platform going forward, and certainly not the opposite.
Okay, second question. On the mortgage side, you showed us, 32 basis points on, on the mortgage side. It's probably lagging effects into, into that number. So what is a long-term good margin for you on the mortgage side, which you can live with?
With all your years of experience, Jan Erik, you know very well that we cannot answer that question.
Okay, then wage growth you can answer. What is your expectation? You showed us 5.4 is the number for the country and 5.1 into next year. Is that sort of the expectation we should put forward for DNB into 2024?
I mean, we are a reflection of the overall Norwegian economy, but what we have said, bearing in mind the composition of staff, we expect to be in the upper end of any type of, of spectrum that might be, might be there. But our best estimate today is 5.1.
Okay. And finally, on this, on the loan loss side, could you give some more color to the loan losses in the large corporate area, or maybe Harald could?
Well, I think, I tried to give you as much as I could in terms of that we aren't seeing any structural changes. And as Kjerstin pointed to as well, there are no industries that points out. That means that we have. You can also see that in terms of the migration, that we aren't seeing a significant overall migration, negative migration in portfolio. The portfolio continues to be robust, and there are no negative signs that we want to point to. Apart from that, there are customers that, of course, in the corporate customer area, that are feeling that the increased overall costs, as well as the increased interest rate level and the lower consumption, as well as the, particularly the activity related to construction, is now something that they feel.
Again, that is not a very large part of our portfolio, but it's more customer-specific situations than anything else.
Okay, thank you.
We should highlight, it's not large corp, it's corporate banking overall, and then that it's spread across-
Mm
... SMEs and large.
Okay. A final question from Roy Tilley in Arctic.
There you go.
Thank you. You, you said one, I have three. Hope that's, that's okay. Firstly, just a kind of technical question on net interest income. I noticed the interest income on commercial paper and bonds was down NOK 800 million compared to last quarter. So I was just wondering if that's volume impact or rates, or-
I think we'll have to come back to you on that.
Okay. Thank you. And then two questions on associated companies. We got some good news for Vipps a week or two ago. It seems like they'll finally be able to provide NFC payments in store. So just wondering if you can comment a bit on that, what we could expect, and kind of related, if that will have any impact on card issuance for you guys? And then lastly, I saw some reporting last week that Blackstone was considering selling or IPOing Luminor. Can you comment anything on that as a minority owner?
Yes. On Vipps, I believe they have been commenting on this in the market, and I think it's right of me to refer that question directly to them. As an owner, we think this is positive, and I wouldn't say that we're worried about the card issuance. I mean, Norway is a highly digitized market, and this is a good step in the... in a positive direction, I would say, for Norway, and infrastructure wise. Blackstone, I'll leave it to you.
Yeah. As you know, there was rumors that came out, and we can't comment on that. Apart from that, that was in the media.
We also read it.
Yeah.
Okay. Just remind me what the book value is for Vipps?
We have a 20% ownership in Luminor.
Yeah, and that's value that currently is?
That's in the fact book.
All right.
Yeah. All right. So if no further questions, I think we will round up this session. Thank you all for following the stream, and thank you all for showing up here, and have a beautiful Wednesday.
Thank you.