Hello, and welcome to the DNB Q1 Conference Call. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now hand you over to your host, Mr. Rune Helland, to begin today's conference. Thank you.
Thank you very much, and hello everyone, and welcome to DNB's analyst call for the 1st quarter. Around the table here in Oslo, we have, in addition to Kjerstin and Ida, Maria Loevold from Personal Banking, Harald Serck Hanssen, Large Corporate, and also Rasmus Figenschou from Norwegian Corporate, and of course, Alex Opstad from DNB Markets. Before we open up for questions, Ida will give you the highlights for the quarter. Ida.
Hello, and thank you everyone for listening in. The Norwegian economy continues to remain robust, with good activity levels in the 1st quarter, moderate growth outlook, low unemployment levels at around 2%, and built-in stabilizers, which provide ample room to maneuver should there be need for that. The Norwegian central bank has kept a key policy rate at 4.5%. The central bank is expected to cut the policy rate twice this year to end up at 4% by year-end. Looking at our results for the quarter, there's really a strong performance across the board and also shows very strong signs of high activity levels going up from the 4th quarter and continuing so also in the 1st quarter. We're well positioned for future fee-related income, also now with inclusion of Carnegie as of March. Return on equity came in at 15.9%.
NII was down 1.8% from the 4th quarter, but up 5.7% from the 1st quarter 2024. NII is impacted by profitable growth, both in loans and deposits, but was offset by two fewer interest rate days in the quarter. Net commission and fees was up 29.5% from the 1st quarter of 2024, driven, of course, among other things, by the inclusion of Carnegie, but also standalone, taking Carnegie aside, we were up 15%, and it's a record high quarter in terms of commission and fees. We're seeing a strong development across the product areas, but I would in particular point to IBD, asset management, and the very good activity level we saw in the real estate broking area, which also supports the loan growth that we saw in personal customers.
On the loan growth side, we saw an uptick of 0.5%, currency adjusted, negative 0.3% if we do not adjust for the currency, and it is predominantly in the large corporate area where you see an effect from the FX. Underlying strong growth in personal customers of up 0.8%, in small and medium-sized enterprises, up 0.5%, and in that area, I think it is important also to bear in mind that we still have not seen an uptick in activity level or growth in real estate, in the new builds of real estate or in the construction industry. It is actually across the board in the small and medium-sized enterprises, beyond entrepreneurs and new builds that is contributing strongly. Large corporates, fairly stable in terms of volumes, but as you can see in the strong development and investment banking, we are also seeing a good activity level in the large corporate area.
There is a robust and well-diversified portfolio across industries and geographies. 99.3% of our portfolio is in stage one and two, and we take impairment provisions of NOK 410 million in the quarter. The capital position remains to be robust, also taking into account that we've now deducted for the acquisition of Carnegie, consuming 120 basis points. The quarter-on-capital ratio is now at 18.5%. Our full room to maneuver and to uphold our dividend policy, as well as support our customers also in the times ahead. The General Assembly gave the board of directors an authorization to buy back up to 3.5% of outstanding shares, and what we've told today is that we are expecting to send an application of up to 1% buybacks of up to 1% of outstanding shares in buybacks, and we will come back to you when we receive approval for that later on.
With that, we open up for questions.
Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, please press star two, and please ensure your lines are unmuted locally as you'll be prompted when to ask your question. Our first question comes from a line of Gulnara Saitkulova from Morgan Stanley. Please go ahead.
Hi, good afternoon. Thank you for taking my questions. The first question is on tariffs. Given the recent escalation in the global trade tensions and tariff uncertainty, particularly affecting the sectors like energy and shipping, how exposed is DNB relative to its Nordic peers? Could you elaborate how Norway's trade profile amplifies or decreases DNB's risks compared to Swedish or Finnish banks? The second question also related to client sentiment. How are your corporate clients reacting to the renewed trade tariff risks and geopolitical tensions, particularly in those export-heavy industries like energy, seafood, and shipping? Are you observing any shifts in investment appetite, hedging activity, or credit demand as a result? Thank you.
Thank you so much for your questions. I'll try and address the first one and leave the second one to Harald. First of all, in view of your question related to risk exposure to shipping and energy, these are portfolios that we have substantially reduced over the past five to seven years. We have a very limited and low-risk exposure to the shipping industry, below 2% of the exposure. Oil and offshore overall has also been substantially reduced and is now at.
2.9%.
2.9% of the portfolio. Now, overall, I think with regards to Norway, it's important to point out that Europe is a much more important trading partner for Norway than the U.S. The export to the U.S. is limited to 8% of the total export, whereas close to 70% of our export goes to Europe. There is a very limited impact, I would say, by the 10% tariffs that have been announced so far. The main trading good is related to seafood that has also previous experience with changing requirements, where we've been seeing that they have been able to find alternative markets. Now, back to shipping, I think it depends on whether this will be positive or negative with regards to which sector you are looking at.
More notably, the most visible effect is obviously related to containers, where we have a very limited exposure, and we're comfortable with the exposure we have. With regards to the longer-term effect, it's still uncertain whether this will lead to lower trade volumes, which could be negative for shipping, or in fact, also if increased conflicts and changed trading routes would lead to increased ton marks and actually increased activity in the shipping industry. I think it's still early to say whether this would be a net positive or a net negative for shipping. We are confident that Norway will still grow, as Ida mentioned, a growth prospect of 1.5% this year. Despite the fact that Norway is an open and small economy, there is a very strong resilience in the economy with built-in stabilizers to maneuver even in times of higher uncertainty.
I'll pass it on to Harald, and maybe you also can comment on shipping if you're interested in something.
Yeah, I think you covered it well, just a couple of details. 99% of our shipping portfolio is now low and medium risk. It's not normal for shipping to be a low-risk business, but after four or five very strong years, it's a robust portfolio. We have around 100 clients that begin to be the 100 best shipping companies in the world, basically. We rely very heavily on non-lending income through the cooperation with the investment banking side. We've reduced shipping portfolio substantially, but maintained the income by shifting to become more a total provider of financing. I'd also like to emphasize that yard capacity is limited, so the supply side looks good, with the exception of containers, where we have a very low exposure.
Ship values are holding up well, partly because there is a lot of liquidity among the shipping companies and because it is difficult to find capacity, as I said, on the shipyard side. When it comes to your other question regarding the activity level, I would say it is a little bit difficult to say because 1st quarter is normally fairly slow, and whether it has been reinforced by the uncertainty is difficult to say. I came back recently from the U.S., meeting some of the big funds. They are on the line, and I got the impression that some projects are being put on the back burner, awaiting clarifications on tariffs and regulatory regime.
I also saw a noticeable increased interest from some of the investors I met looking at opportunities in Europe in general, and I would say Nordics specifically, which of course provides interesting opportunities for us as a Nordic bank.
Thank you.
The next question comes from a line of Shreyas Srivastava from Citigroup. Please go ahead.
Hi, and thank you very much for taking my questions. I have two, please. The first one is on the Carnegie acquisition. What has your sort of client retention rate looked like following the merger, and what feedback have you received from clients after this was completed? Secondly, in relation to the proposal for a further buyback of up to 1% share capital, how do you view your capital distribution strategy going forward, trading at 1.5x book value? What is the logic for buybacks versus dividends at this current time? Thank you.
I'll answer the second one and leave the first one to Alex. First and foremost, we see buybacks as an integrated part of our dividend strategy and capital allocation over time, and still believe that we are far from a valuation or levels that would lead to us considering not to buy it because of too high a price. Our dividend policy is very clear. It has been, and we've delivered consistently for many years with a cash dividend of more than 50% of the result per year and an increasing payout nominally per share per year. We use the buybacks as a more flexible tool to optimize around the desired capital level.
In addition, obviously, priority number one is to reinvest in the business, and we remain comfortable that we have ample capability and capacity to support our clients and at the same time still deliver on our dividend policy. I think the information about sending an application this week for an additional share buyback is a testament to that.
Thank you, Kjerstin. I was answering the question on client retention. I think the short answer is really no turnover in many ways. If I were to delve into the client feedback or probably try and segment it between different client groups, I think in private banking, to comment on the wealth management side, clients seem very appreciative that they will have access to a broader product portfolio and sort of be able to deepen their relationship with Carnegie private banking. On the investment banking side, the feedback is very much the same. DNB and Carnegie are very complementary in their position in terms of products and geographies, so they acknowledge that they will receive a stronger product overall and that objectively we will become the market leader in several categories in the Nordic region.
Lastly, on the security side, being equity sales and trading, equity research, and fixed income sales and research, I think clients appreciate consolidation because they do comment that quality has been somewhat spread out amongst the providers, and consolidating that quality on sort of fewer players is in their self-interest.
Understood. Thank you very much.
The next question comes from a line of Sophie Peterson from JP Morgan. Please go ahead.
Yeah, hi. Thanks for taking my question. Just going back to the share buyback, the 1%, how quickly should we expect that to be executed? The 3.5% approval that he got from the AGM, should we expect that to be fully utilized against 2025 earnings? My second question would be on kind of the fees. They were very strong. Also underlying, does the fees include anything that you would say is a little bit more temporary in nature or a little bit like more one-off or anything that could reverse in the 2nd quarter, second half of the year? Lastly, could you give an update or say if there is any update with your stake in Luminor and what your plans here are? Thank you.
I'll start with the last one. No, there's no new updates in terms of Luminor. If we start with the timing of potential share buybacks, of course, this is dependent on when we receive an approval from the NFSA. That is really not in our hands and not really something I can speculate on, but my understanding is that usually taking between four to six weeks. Again, that's not something that we can control, so that's the timing issue.
When thinking about 1% in connection with 3.5%, I think it's important to say that we are doing this in a similar way that we have done in the past few years, namely splitting it into smaller pieces, also due to the fact that it provides us with the flexibility and also due to the fact that when we announce a new program, it's being deducted from the quarterly one capital ratio immediately. We expect to do the same this year if we still remain to have room to do share buybacks after this 1% going forward. When looking at the fee base, we have a very strong momentum and strong activity level. As we pointed to, investment banking delivers a very strong set of results across the board. We had high activity on both high-yield bonds, but also investment-grade bonds, as well as M&A.
I think if we start there, one of the areas that we expect has slowed down also due to the turbulence is the IPO market or the equity capital markets. Apart from that, I think we still see a momentum. The markets are still open, but again, I think it's important to look at this also from what's happening around us. We had a good activity level in the 1st quarter in investment banking, both from Carnegie and from DNB. On the investment or on the asset management side, there was also a strong development in terms of the underlying activity. On the other hand, that's of course, asset under management is impacted by the values and the development that we see in the share market overall.
Of course, some turbulence also means that some of our retail customers are taking out funds from mutual funds and setting it on accounts. What we are seeing is that customers are now reinvesting that into mutual funds again. I think those are the two main areas of driving fees and commissions also in the years ahead. Of course, some of that will be an element of activity overall in the market, but some of it will also be more resilient, bearing in mind that we are growing on wealth management and not the least pensions.
Very clear. Thank you.
As a reminder, if you'd like to join the queue for questions, please press star one on your telephone keypad. The next question comes from a line of Riccardo Rovere from Mediobanca. Please go ahead.
Good afternoon to everybody. Thanks for taking my questions. Three, if I may. The first one is on NII. When I look at your fact book, and I am making reference to table 1.2.1, in Q1, I noticed that the NII in personal customers is up significantly, but kind of significantly that related to loans, but falls even more significantly on deposits. I also note that in the very last line of the table, what you call other, the NII falls by kind of NOK 450 million or so. This seems to have happened exactly the same in Q1 2024, with different magnitude, but more or less the same. Would you be able to explain what's going on, especially on the personal customer side?
Because rates have remained sadly stable, I would suppose nothing major should have happened on the margin side, and the movement in volumes cannot certainly explain movements by 10% up or down in a quarter. This other thing, which is down NOK 500 million in a quarter, what is that, if you can explain? The second question I have is on Poland. I read there were some provisions related to Poland. Can you shed some more light on the level of coverage or anything like that on the legacy portfolio in Poland? Last, I wanted to ask about if you can shed some light on synthetic securitizations. If you have been using them, how much? If you see room to make a more extensive use of this instrument to optimize capital allocation? Thanks.
Thank you for your questions, Riccardo. I'll answer the first one, and Ida can take the two other ones. I think just simply NII, it is a factor of fluctuations in the money market rate. That is the reference rate that we are measuring the activity in personal customers towards. The reason why there are bigger movements in personal customers compared to the others is that both large corporates and corporate banking Norway have margin-based loans and do not have the same volatility related to money market rates. With regards to others, that is a bucket with several elements into it, amongst other treasury revenue and also reflecting activity in the repo market where the 1st quarter was a very active market for us. In terms of Poland—oh, sorry, Riccardo.
No, no. If I may just follow up on this, on the other, I understand the personal customer makes sense to me. On the other bit, it exactly happened the same thing in Q1 2024, and Q4 2023. In Q2 2024, it went up again by NOK 500 million. I mean, I know you are reluctant to give any kind of guidance, but it seems to me that here, is it fair to assume that in 2025, it should not be horrendously different from what we've seen in 2024? On that line, because it falls, and then it jumps back, then it stays flat, and then falls again and jumps. Maybe, maybe it will jump, I don't know.
I think.
If you look at the trajectories.
Yes, but I think one of the reasons why we are a bit reluctant is that there are also other elements that impact other. If we are looking at repo and treasury, there are positioning towards the end of the year where many banks are reluctant to sit on a lot of deposits because that triggers regulatory costs. There is quite a lot of balance sheet management, we should call it, in the market around year-end. If we isolate it to that element, that is one of the reasons why we tend to see the movement that you are describing. Whether there could be other elements impacting it in future quarters that would change it, I think it's difficult for us to say.
There is certainly a history of volatility where this tends to change in the way you described it over year-end between 4th quarter and 5th quarter.
Okay.
When it comes, did you get a response there, Riccardo?
Yeah, yeah, yes. That's okay.
When it comes to Poland, you are right in we have taken somewhat more impairment related to the legacy portfolio in Poland. There is no change really in terms of either customer activity or in the underlying risk in that portfolio, but more a reflection of the fact that we followed this very closely. We followed the development and are taking then reserves or impairments related to what we think is the best estimate at any given time. There is no change apart from that that needs to be commented upon. When it comes to securitization, as you know that we did the—we had a test, I would say, in terms of trying out securitization as a tool, as a capital optimizing tool last year.
We have said that we would like to continue looking at this also as a tool to manage capital in the best possible way also going forward. We will continue to do that going forward. Apart from that, we have not announced anything.
Okay. Just one quick follow-up. On Poland, would you be able to share with us what's the amount of provisions that you charge related to Poland in the quarter?
I don't think that we have announced that, no. Again, it's not very material. If you look at the overall picture, we're taking impairments of NOK 410 million in the quarter. Some of that stems from Poland. Some of that stems from customer-specific situations.
All right. Okay. Poland is not the majority of the amount of provisions that you have taken this quarter. That's not the case.
We have not shared further details.
Okay. Okay. Fine.
I'm saying that is it.
All right.
The next question comes from a line of Jan Erik Gjerland from ABG. Please go ahead.
Thank you for taking my question. It's Jan Erik Gjerland from ABG. Two from my side. Follow-up on the NII. It looks like your long-term funding cost has sort of increased Q on Q. Is it sort of this particular margin increase you have seen in this quarter versus previous years? Has the spread widening made your funding being more expensive? Secondly, on the benefit from the S-Banking portfolio, could you shed some light into what your expectations were ahead of the implementation of the IRB model into the 2nd quarter and what the outcome was versus this year or three, which was on 20 basis points? Was 20 basis points of expectations of S-Banking initially, or was that higher, the capital benefits you have been gaining from S-Banking over time? Thank you.
If we start with the funding cost, that's purely an element of the fact that we have higher volumes, and therefore funding cost increases based on that. It has got nothing to do with spreads or funding costs overall in terms of for the bank. I would say on the opposite, we are one of the best-rated banks in the world and benefit from very good and sound funding overall. When looking at S-Banking, you're right in saying that we have received approvals for moving S-Banking from standard approach to IRB. That will be done in the 2nd quarter. We are doing it alongside with the implementation of CRR3. When looking at the actual effects of moving S-Banking to IRB, you need to think about two things when comparing it to what we announced in connection with the acquisition of S-Banking.
First of all, some of the portfolio has already been moved over to IRB due to the fact that every time a customer refinancing its loan in the S-Banking portfolio, once it was transferred over to the technological platform of DNB, that meant that it was actually automatically being integrated into IRB. So we've already taken some advantage of IRB in the S-Banking portfolio by just refinancing that portfolio, which is a portfolio that refinances quicker than the standard DNB portfolio. The other element you need to think about when looking at the effects of moving it to IRB is that with CRR3, the benefit of being on IRB has decreased. You have a positive effect purely on just by CRR3 being implemented, even if it was the standard models. Then we have a small positive element on top of that, making it IRB.
I would say it's very minor in connection to, or when comparing it to what it was before we had CRR3. We haven't really quantified the effects or split it, but we're now combining it to say that actually overall, the S-Banking capital relief that we expected from moving it to IRB is now taken out. We are also seeing neutral effects from CRR3 in combined with the transfer of S-Banking over to IRB.
Very good. Can I just have a follow-up? It looks like also the risk weight changes from 20 to 25% has given you a lower impact than you previously thought. Is that because you have sort of taken on more risk on your current new lending in mortgages?
No, definitely not. This is more a reflection of the fact that we are looking at the different parts of the portfolio and also adding more of the personal customer portfolio over to IRB.
Okay. Can I have one more? Have you seen any changes to the customer behavior in the asset management part of Carnegie after you took charge?
No, we have not seen any change in behavior in the Carnegie portfolio. Typically, they have more institutional, more professional investors overall. Where we have seen changed behavior towards the end of the 1st quarter and coming into the 2nd quarter is that some retail customers decided to exit their parts or all of their investments into mutual funds. It is, however, a limited number. The vast majority, more than 95%, have stayed with their savings strategy. It has been interesting to note that from how we see the information, it looks like those who have more experience have had savings in the markets for a longer time.
Those who have been in contact with us or have received advice in some way have been more resilient in staying in the market in these more turbulent times, whereas the new digital savers in more index-related products have been the less secure part. Again, markets have normalized, and we've also seen flow coming back in recent weeks. It is not very big movements that we're talking about.
Perfect. Thanks a lot for your answers.
Thank you.
The next question comes from Ina Landengen from Pareto Securities. Please go ahead.
Thank you for taking my question. Just a question on NII. The amortization effects seem to increase from quarter to quarter, whereas we expected it to reverse from the Q4 highs or what we saw as a Q4 high. Could you just discuss the current level there and any seasonal effects we should be aware of? Thank you.
You are right in that. We had a strong activity level in the 4th quarter. I would say if you look at it from a seasonal perspective, we were expecting that to decrease in the 1st quarter. On the other hand, as you can see from the strong development in markets and investment banking, as well as the low volumes that we are seeing in large corporates, if you take that in connection, that also means that there has been a strong and underlying activity in terms of financing or refinancing activities. When we have more refinancings than what we have anticipated, that also means that you have more amortization effects related to NII. Therefore, you see an uptick in this quarter from a very strong 4th quarter result.
Okay. Thank you. Just shortly on the post-it margins down 10 basis points or so, somewhat more than the one-neighbor movement, but some margin erosion there. Just given the sort of interest rate sentiment, how that shifted during the quarter, and we did not have a rate cut after all in March, did you see any change in the positive behavior during the quarter or into Q2? Could you discuss that a bit as they tried to adapt for higher for longer? Yeah.
No major shift in behavior from the positives. It's a combination of factors impacting the margin. One, as you were saying, it was a decrease in money market rates for one. There is some continued behavior of moving deposits from typical transactional operational accounts into more savings and investment accounts. Number three, we've had attractive growth in the quarter. A substantial part of that growth stems from organizations which are attractive but lower yielding, lower margins than the average portfolio overall, and thus impacting the overall margin level for the book. Those three, but no big shift as to the switch amongst products. It's rather a behavior that is tapering, leveling off compared to what we've seen in previous quarters.
Thank you very much.
A final reminder, if you would like to ask a question, please press star one on your telephone keypad. We have a follow-up question from Riccardo Rovere from Mediobanca. Please go ahead.
Thanks. Thanks for taking my follow-up. If you had to assess at what level is the integration of Carnegie into DNB, would you say this is almost done, almost completed? On that front, how much of your time is, Kjerstin, devoted to integrating Carnegie and to exploring new ways of increasing capital light operations? This is my question. The second one is more of a curiosity, actually. Why only 1% buyback? Why not bring it down to zero? Why just not giving it up? What's the point of only 1%?
Thank you, Riccardo. I will start on the first one and hand it over to Alex. I think Ida partly answered the buyback question on Sophie's question, but I'm sure she'll be happy to repeat it. As announced today at the press conference, the legal close of Carnegie took place in March. Next week, we will be officially launching the merged new investment bank, DNB Carnegie, which is the merger of equals when it comes to investment banking activity. That forms the foundation for a Nordic powerhouse across investment banking and wealth management. For some, it's been a deadline to reach the official launch of day one. I know Alec will also say that in some way, it really feels that now, it is beginning.
However, with regards to my time being spent, I think the work up to here, to a large part as well, and from here really is up to the people working with and talking to our customers on a daily basis. That is where the work will need to be done. We are very optimistic about the outlook and the opportunities that merging and changing a business always comes with its challenges. I am very confident that Alex, Harald, and I are well prepared for that. With regards to my time and whether you're referring to organic versus structural opportunities, I again reiterate that we are primarily focusing on organic growth. This is also the case and has been for developing capital light revenue, which we have done quite successfully over the years.
Now, there will be a substantial uplift with Carnegie, as you've seen only from including March in today's numbers for this quarter. We have upped our ambition for a more than 9% growth in fees and commissions from here. Mobilizing the organization, delivering on strategic ambitions where a strengthened Nordic platform and executing on the strengthened Nordic platform, as well as the business across the group, that is the primary goal and what we spend the most of our time on, including me. Alex, maybe you can develop on how far we have come.
Thanks, Kjerstin. As you say, this is very much a gradual process. In many ways, it's been going on since the announcement. Next week, we will have a common brand and common operations within the two business areas where we sort of overlap, and that's within securities, research, and broking, and within investment banking. As you say, Kjerstin, it's more getting to the starting point in many ways, but we will have gotten far away on the integration into those two areas by next week. The sort of full process is more what will take 18-24 months to realize from sort of where we are today. It is a gradual integration. So far, I believe it's going, if anything, marginally better than expected.
Good. When it comes to share buybacks, as I think you remember as well, Riccardo, approximately two years ago, we changed process, whereby it meant that as soon as we receive an approval from the NFSA and we launch a program, that means that it is being deducted from the quarterly one capital ratio. At that point, we also decided to split it into smaller pieces and do it, rather send in applications more frequently and then launch programs more frequently and utilize it that way. That is the similar way that we are approaching it this year. We also believe that to be the best way, bearing in mind that we want to continue utilizing share buybacks as a tool to optimize the capital position, but also being aware of the fact that there is an increased uncertainty in the world around us.
Therefore, we also want to show that we are managing this in a very prudent and responsible way.
Okay. Thanks. Are there any liquidity constraints on the buyback?
No.
No. Okay.
We have a follow-up question from Jan Erik Gjerland from ABG. Please go ahead.
Hi. It's Jan Erik` from ABG again. Just follow up on the lending side. Firstly, you said that it was quite flat on large corporate FX adjusted in the quarter. Last quarter, it sounded like it was more a jump in the corporate lending, large corporate lending, because you had some bigger changes in your book. It sounded like it was more of a shorter-term financing. The volume of NOK 491 billion you have in the large corporate average today, is that sort of a new level to stay, or is that something you think will churn off as we go during this year? Secondly, on the personal customers, it seems like the average level is still sort of growing in the right direction, but not as fast. What have you seen towards the end of the quarter?
Have you seen the interest rates starting to bite for the new lending side or new refinancing side versus what your previous expectations have been? Thank you.
Thank you, Jan Erik. I think you know our strategy and our operations quite well in the large corporate side. This should not be seen as a new level. I think you have seen over time that we are both growing the book steadily and consistently if you look at a longer-term basis. Indeed, it may vary from quarter to quarter in view of the fact that this is a book with a very high turnover, turnover of the capital of less than two years. That gives you an indication of the magnitude of business that needs to be done on an annual basis for this book to continue to grow. These are large transactions, transactions where we also on occasion underwrite, syndicate, sell to the market.
We do bridge-to-bond transactions, and we do more traditional financing and revolving credits that are also drawn, part of them on a seasonal basis. I think nothing else should be read into the 3rd or 4th quarter numbers other than the fact that they were very active quarters where we closed a lot of transactions. During the course of the year 2024, we also took on a large number of new customers that we have commented upon. Focus also 1st quarter, which is seasonally, not typically a quarter where there is a lot of growth because books are closed for year-end, and it takes some weeks to start off. Our focus is also very much to broaden these relationships and focus and build on cross-selling.
Consistently, the book on large corp has also grown alongside, and they have contributed to the 3-4% growth we are looking for the group as a whole on an annual basis. We expect that to be the case also in the future. With regards to your second question, I kind of missed which area you were asking in.
The mortgage book. Have you seen any changes to the mortgage willingness to take on new mortgages towards the end of the quarter and into the more uncertainty on the interest rate side?
No. The short answer to that is no. We have, as announced earlier today, a record high inventory going into the 2nd quarter with a 30% increase in number of financing certificates. Very fresh reports from our real estate brokerage that the activity level in the market continues to stay very high. We have not seen this in the housing market. We have also not seen it in consumption with regards to the information and data we can read from the use of cards and payments transaction. This is typically an area where you would expect maybe to see it somewhat sooner. That has not been seen. I think an area that provides comfort as well is also the wage growth, where yet another year we expect most Norwegians to have an increase in their disposable income with a wage growth of 4.4-4.5%.
We still expect consumption to be a driver for increased economic activity this year compared to last.
Okay. Thank you.
There are no further questions. Handing back over to you, host, to conclude today's call.
Very good. Thank you so much for your participation and all your good questions. We here from Oslo would like to wish you a good rest of the day. Thank you so much.