We can see a quarter where strong innovation, we had good customer growth and very nice outcome in external surveys. Some pieces what we have done during the quarter is that we have launched a new fund site, better overview, better user experience. We have better comparison with different funds. We also launched trackers together with Morgan Stanley, which is a substitute for our U. S.
ETFs that we no longer can offer due to me for 2 reasons. And we also have offered more European ETFs that's been quite our customers have welcomed them quite a lot. I think an important part is also that we have launched a site for or part of section on our website for sustainable investments. And I think looking at the market going forward, I think the guidance and help the customer wants to make sure that they're marked for a good cause is an increased demand. And I think that we have taken several nice steps towards helping our customer with that.
Also, together with Staviello, we launched green mortgages, which means that the customer gets 10 basis points discount if they have an energy class A or B on their apartment or house, which also have been appreciated by the clients. We also launched foreign data on our foreign stocks, which has been very appreciated. I think it's about 50,000, 60,000 new stocks, non Swedish stocks that our customers now have much better data on, which is especially appreciated when it comes to Canadian and U. S. Stock.
Also in the beginning of the quarter, we took a big step. We have now biometric login in our mobile apps, which is, of course, making it even easier for our customers in a secure way to log in to the mobile app and conduct their business. A few milestones I think will pass. We have over 900,000 clients, which means that we are on a good way of reaching our goal by 1,000,000 clients of 2020. ServiceScore, best service in the financial industry, we were awarded that again 50 year in a row In the recognition C Force Kantar survey.
We were the most admired bank in the industry and the 8th company total in Sweden. And we also won the Libri Award for Avanpa 75, which is our allocation fund for especially for pension very satisfying. If we go to the next slide, you can see the net inflow. And I think this is very promising for us and encouraging, the savings capital is now up to almost $360,000,000,000 The net inflow Q2 compared to Q2 last year was up 71%, and the net inflow was 24% higher than the 1st 6 months of 2018. And as you can see on the chart, the net inflow, except for January 18, which was an exceptionally good month, has been substantially higher month by month.
Also a little milestone for us is, of course, that the fund capital is now over SEK 100,000,000,000. And I also think that our increased focus on share of wallet is starting to pay off when it comes to net inflows. We have made it much easier to move equities and funds from other banks into Avanza in a total digital manner. It's very appreciated by customers, and I think that it's more customer to go through the whole process. And we also see that the number of mistakes done by customers when they don't have to fill out all the forms has been a lot less.
The income for the quarter was the highest income ever. It's a record quarter when it comes to income. And the income also outgrow the cost growth in the Q2 and the quarter the Q1 of the year. That means that if nothing very unexpectedly will happen in the rest of the year. We believe that we now can deliver on our target that the cost increase will be lower than the income increase for the rest for the full year of 2019.
If you go to the next slide, it's a bit about we had a very good quarter when it comes to high customer activity. We have never had a quarter where so many customers generating Broker Shinkansen for Avanza, even though the turnover was a little bit down. And also number of commission generating customers and notes were at a record high level. And I think that's a promising sign that our customer is very actively and the way we are developing our offering is also making our customers more actively, and that's a good sign for the future. So that activity is something we look very positively on.
If you go to the next slide that we usually show, we keep our position as the number one when it comes to number of transactions on the stock exchange. And we also can see that turnover with number 2 now declining a little bit, but that's a lot to do with the institutional trading where SEB are quite strong. We are not in that segment of the market. We can also see that foreign players are entering and gaining market share when it comes to institutional trading. But all in all, we're keeping our position as the number one in transaction, which is, of course, very important for us.
Next slide is something we talk a lot about during the last year or so is that we have a strategy for creating more recurring income. On the slide, you can see that brokerage income and fund income has been, so to speak, stabilizing a little bit, and that's due to the NII increase that we have during the quarter the year so far. So if we take the next slide, we made a slide where we took away the NII income to see how the brokerage and fund commission and other income develops. And you can see on that slide that the fund commissions, which are at the high level now, is not almost, but it's sooner or later going to, so to speak, be at the same level as the brokerage income. But at the same time, it's very important to understand that we love brokerage income and the strategy is not to get rid of brokerage income as a dependent income flow.
It's more that creating a more stable top line within the company, but we love brokerage. We have more clients than ever who generates brokerage. And we also see the brokerage income right now being very in some sense, a good quality because during the quarter, we had no Bitcoin trading. We had no fingerprint trading, no cannabis trading that was sticking out in a big way. We did have some Bitcoin trading picking up at the end of the quarter, but that had more or less no effect on the total brokerage income.
So, we believe also that the brokerage income is so high quality. We like that, but also that the mutual fund income quarter by quarter, the volumes is over $100,000,000,000 is showing good signs for the future. Moving to the next slide. As always, important for our success is, of course, customer satisfaction. We have to continue growth in both number of customers and volumes.
And I think that you will see a bit more focus on asset under management. We also had $100,000,000,000 as I mentioned in mutual funds volumes, but we also had a pension company asset under management for the first time surpassing $100,000,000,000 is also some of the milestone for us. And we can also see that the tempo in innovation, the efforts the last couple of years of increasing number of employees to pick up the pace in innovation and also time to market is starting to paying off and is appreciated by our clients. And that's always, of course, employee engagement key. And during the quarter, we had an ENPS, which is 56, which is by far the highest number ever by Avanza employees, which means that the commitment, engagement and the enthusiasm within Avansa staff is at the record high level, which is, of course, very promising looking at the things that we have ahead of us after the summer.
So all in all, I think the strategy is working. I think we are getting where we want to go. I think the reoccurring income looks good. Innovation is at a very, very high level at the moment. And we can also see that the important thing that the income is starting to outgrow the cost growth means that all the efforts we have done the last couple of years is paying off.
With those words, I would like to turn over to Birita.
Thank you, Richard. So let's look a little bit on the figures. So the revenues, as Rick had said, was all time high in the quarter, up 6% from Q1, mainly due to higher fund commissions and higher NII. Comparing the 6 month period with last year, revenues were up 7%. Operating expenses were slightly higher than last quarter and up 8% for the first half year as planned for and in line with our budget of 10.5% cost growth for the full year.
Consequently, cost growth will be a little bit higher in the second half of the year with an estimated slightly higher increase year on year in Q4. And as Rickard mentioned, if nothing unexpected happens in the next half year, there's a good chance that we will reach our long term target regarding income growth higher than cost growth for the full year. Operating profit increased by 18% quarter on quarter and by 4% for the first half year compared to the same period last year. Consequently, the operating margin improved to 41% in the quarter, which was the same level as a year ago. Revenues for savings capital was down 1 bps compared to Q1 and down 2 bps for the 1st 6 periods compared to last year, and this is mainly due to higher average savings capital.
Cost per savings capital was down 2 basis points to 19 quarter on quarter and 1 basis point year on year. Our long term ambition is to lower the cost per savings ratio close to 16 basis points, in line with the best international peers. Revenue were, as I said, record high, up 6% quarter on quarter and up 17% compared to Q2 last year. Net brokerage income decreased compared to Q1 due to 5.5 fewer trading days in the quarter, while the brokerage income for trading day were the same. However, number of commission generating notes were record high, although volume decreased by 12% quarter on quarter.
Compared to Q2 last year, net growth rate was 14% higher even though the number of trading days were fewer. Brokerage income per segment turnover increased from 9.4 to 10 basis points due to a larger share of the brokerage fee related to transactions in lower brokerage fee costs. Fund commissions increased by 15% quarter on quarter, mainly due to higher average fund capital. Income per kroner fund capital rose marginally to 34 basis points, although decreased by close to 2 basis points to 33 for the first half year period compared to 2018. This is a result of somewhat higher portion of index tons.
NII increased by 29% quarter on quarter and by 74% year on year. This is the result of course, of the rate the repo rate in January and consequently also higher cyber, which decreased the cost for our surplus liquidity. Since the bond portfolio is managed at an average interest duration of 3 months, the interest rate hike was not fully materialized in March, giving a positive view throughout the Q2. Income from margin lending was also improved quarter on quarter due to slightly higher average lending volumes and higher average interest rates. Compared to Q2 last year, income from savings account plus and our private banking mortgage increased.
All else equal and without taking any changes in customer behavior into account, a 1 percentage point increase in the interest rate from here, with today's volume, would affect full year end net interest income by over BRL 300,000,000. Other income increased slightly quarter on quarter, mainly due to higher income from corporate finance and lower other commission costs. Income from Amalfa Markets was slightly down quarter on quarter and FX were down by 7%, mainly as a result of lower trading in pharma equates. Compared to last year, income from corporate finance was lower, FX related income slightly down and income from Avanta Markets increased by 19%. Payment service commissions increased due to trading in foreign securities.
Looking at the costs, operating expenses increased by 1 percent quarter on quarter, mainly a result of higher personnel costs. Marketing expenses decreased. Compared to the Q2 last year, costs were up 8%, also a result of higher personnel costs, mainly due to expanded development capacity. Due to the introduction of IFRS 16 in 2019, leases on premises are as of 2019 recognized as a right of use asset and a lease liability in the balance sheet. This reduces costs for premises included in other costs, the green line, while depreciation increases by about the same amount, which is the yellow line.
At the same time, an interest expense of about $500,000 a quarter arises in net interest income in 2019. Reported credit losses, which is, however, not shown in this graph, are attributable to calculated expected credit losses according to IFRS 9. Our capitalization is still good with the capital ratio of 16.6 percent to compare with the capital requirements of 16.1 percent, which includes all external and internal buffers and Pillar 2 requirements. Since the report hasn't been subject to review by the auditors, the operating profit for the year is not included in the capital base. The decrease in total capital ratio compared to Q1 is mainly due to higher risk exposure amounts of credit risk regarding the current bonds and institutions as well as somewhat increased mortgage lending to our private banking customers.
The leverage ratio for the group was 2.9%, which is just under the required level of 3% and is expected to be implemented in June 2021. This ratio is what's going to steer our capital needs going forward rather than the total capital requirements. We are looking at different solutions to manage this, which can be done either by adding common equity Tier 1 capital or by finding a solution to manage the deposits on the balance sheet. We are also discussing the size of a buffer to the requirement. We'll come back to that later on.
So our dividend policy will distribute at least 70% of the net profit to the extent. And with that, Piyush, I think we could open up for questions.
Absolutely. Thank you, Piyush Pan.
And our first question comes from the line of Hermann Kirich from Nordea. Please go ahead. Your line is now open.
Thank you and good morning. Thanks for taking my questions. So the first one is on your budgeted cost increase for 2019 is 10.5%. So in the middle of the long term guidance, you've given us 9% to 12%. But could you give us any insights to what could actually make your cost grow more in 2020 and onwards than 2019?
Well, we haven't said that it will grow more in 2020. And of course, as you know, a very large part of our costs are personnel costs. Over 70% of our total cost is connected to employees. So that, of course, is a decision from our point of view, depending on what opportunities we can see in the future. And we are guiding for 9% to 12%.
It could be 9% and it could be 12%. But from this point of view we are right now, we don't foresee outgrowing the cost growth for 2019.
Okay. Thank you. And I didn't fully get did you give some guidance on how the cost will be distributed between Q3 and Q4 to reach the budget to have a 10.5? It sounds like Q4 would be Yes.
You will be higher cost growth in Q4 than in Q3.
Okay. And then on the commission per unit of turnover, I know the metric is quite volatile between quarters, but is there any sort of factors or special market conditions we can look for when we're trying to foresee which price category of your clients that have been most active during a quarter?
That's impossible to answer that question. It depends on total market conditions.
There are no metrics to follow that, I would say, for you to see that. So unfortunately, no.
Okay. And then just one final question on Stabilo. So if we look now in Q2, the quarter on quarter growth is around 800,000,000 dollars while it was quite substantially higher in Q1. How much would you say that you've felt the increased competition on the Swedish mortgage markets?
I would absolutely say that you can see an increased competition. I think that customers are being more price sensitive, more players in the markets has lowered the prices. I wouldn't call it a price war, but I think it's absolutely tougher competition. And I think in the answer to that, I think that we are one of the players who probably initiate a little bit more of price competition when it comes to mortgages. And I think that's been beneficial for the Swedish consumer.
And so and by saying that, I also think that the development of Staviello is according to our plans and our expectations. But I think that we've been in this market together with Staviello for a little bit over a year, and I think this is really a marathon to build a good mortgage portfolio. So this is a long term commitment from Novartis.
Okay. Thank you. That's all for me.
Thank you. And our next question comes from the line of Patrick Vartellis from ABG. Please go ahead. Your line is now open.
Hi, thanks for taking my questions. I had just one. So you talked about your financial target that the income should grow faster than the cost growth. But by looking at the consensus estimate on your homepage for 2019, it doesn't look like you will be able to reach that target and if you stick to cost guidance for 2019 that you reiterated today, so which of the income lines will make you reach this target. So what is it that we underestimate?
What is the potential here?
Well, I would say that what we see is the momentum that we have now. We're growing net inflow, growing new customers. The fund savings capital is growing. Our pension capital is growing and seeing a lot of momentum going in the right way. So if this momentum continues, I would say that all the revenue lines will probably exceed the consensus that you can see on our platform.
But then, of course, and as we say, this is a market question because it depends of course what happens at the next 6 months in the market. But I would say we are in a good position to see the revenues increasing even more than the cost.
I think that's a good answer by Peter, because I think if you look at we have more customers than ever generating brokerage income. Our fund volumes are growing. Our pension company is growing. So I think it's probably all the income lines that will be affected in a positive way going forward at the rest of the year.
Okay. And then just a follow-up question on Stabelo as well. Yes, so your quarterly net inflow was a little bit more than EUR 800,000,000 significantly down compared to Q1. What is a monthly a quarterly run rate for Stabelo that you would be satisfied with?
We don't disclose that.
But it's closer to the Q1 number compared to Q2? Or was Q1 very strong?
No, we will not maybe in the future, but now we are not disclosing anything about our expectations or what we think about the volumes of soltavello.
Okay. Thank you so much.
Thank you. And our next question comes from the line of Petr Ciesakov from SEB. Please go ahead. Your line is now open.
Hi, thanks. Peter here. So I think I'll start with a follow-up question on Stabilo. Lending grew kind of half the pace roughly that it did a year ago. But you're writing in the report that you're seeing more applications, which is a drag on your other commission income.
Should we read that as kind of you have more applications but less conversions to actual loans? Or has there been a change to the pricing model between you and Stabilo that means that it's a bigger drag now in Q2 versus Q2 last year?
Well, I would say that it takes a little bit time to administrate new mortgages. So of course, you will probably see the costs before you see the revenues and or you see the lending volume as well. So as you know, Sabelo lowered their interest rate during this quarter, which has been a positive effect on the applications. And I would say that as I said, the costs usually come before the actual volume.
And would you say that you're seeing then more applications now than last year, even though lending grew more a year ago?
Is that a fair assumption or
No, I think that the general answer would be that we did roll over to 1.09 in end of November, then we had a lot of applications and then SBA being lower to when we increased since the repo rate increased, SBA lowered, they had enormous inflows in Q1, and we followed down to 129,000,000 with SBA and other applications have been picking up since. So I think it's that's the answer I'd like to give. But I think the general comment would probably also that I can see thinking digitalization and the debate about mortgages, of course, rights is becoming more and more a factor and very good UX experience and the digital application is becoming more and more important. So I think that my personal opinion is that I think that mortgages are becoming more of a valid product than a relationship product.
Okay. And then just in terms of the profit contribution from Stabelo. I think that the profits or sorry, the losses increased in Q2. Is there any I mean, do you have any kind of feel for when you think a breakeven level will be reached when it's and what would you expect going while looking into the second half of this year? Should losses continue to increase in order to drive growth?
Or do you have any comment to give on that?
Well, I would say that, that depends on SABELO and what decisions they make regarding their offering. So they have only one product or 2, if you count the green mortgage as well. And of course, they are in the beginning of their journey and would probably have a lot of things to do in the future. So I mean, I would say that it's more or less impossible to answer.
Okay. It's very linked to volumes, of course, and the pace that the volumes can grow and that a lot of the things on Stabilo side is growing those volumes. But I think we are on the same boat with Stabilo in that one.
Okay. Then over to yourself. In terms of salary inflation, when I look at kind of personal expenses per Feet, it's up 5% year on year. I think it was up 6% in Q1. Is that kind of the number in that you're seeing in terms of salary inflation?
No. I wouldn't say for what we give guidance on what to think about salary inflation. But I would say a general comment is, of course, that we are competing for the talent in the tech industry in Stockholm. And of course, that increase will be higher than the general increase in salaries in Sweden as a whole. But I think it's impossible in this competitive environment to answer that question.
Okay. Then just a final question, which kind of goes back to something I think I asked in the Q1 number. The new tool that you made, which helped people move their funds at other banks onto your platform. Have you seen that, that has had any kind of a tailwind or any help in the inflow number? And do you think that could have any meaningful tailwind going forward throughout the year?
It's very difficult to single out that service as being a tailwind, but I would probably see that it's at least a tail breeze.
Okay. That's good. Thanks for that.
Thank you. And our next question comes from the line of Jan Talleyen from Carnegie. Please go ahead. Your line is now open.
Okay. Thank you. Just one clarification and then one more broader question, if I may. On NII, I have to be clear, is the full effect on the rate hike now visible in the Q2 numbers? I mean, if the rates stay the same, is this a normal run rate for the second half of twenty nineteen?
Yes. As we said and had said before, we had a full effect in March. So definitely, for the 3 months in Q2, we had a full effect of the rate hike, yes.
Okay. Perfect. And then as on pension transfers, Rykel, you are, I guess, a little bit skeptical to the government's new proposal in terms of ensuring it's easier to do the pension transfers between providers. Does this proposal now mean that the stock is effectively off limits to you, where it's going to be difficult to transfer occupational pensions from 1 provider to yourselves?
I would say it's not going to be more difficult, but it will not in any way be easier. I think that the government very clearly wants to protect the pension companies more than to want to enhance the pensioners' future pensions, because I think that if you're allowed to take deferred acquisition costs up to 10 years back, that will be a high cost when the consumer looks at it. So I think the proposal from the government is to try to make them look very consumer friendly by protecting their friends at the pension company.
Okay. And I guess lobbying from players like yourself, you don't expect that to yield any changes
to the proposal? Of course, we try to lobby. We talk to people. We do things. But I think the pension industry in itself is extremely old fashioned, strong, and it's a little bit David against Goliath in this question.
And I think the consumers and the citizens of Sweden have to start to understand how much they are paying for nothing.
Okay. But I'm not going
to move that. I still think the problem is that or the challenge is that even though you get one off cost as a consumer moving your pension, if you get rid of 0.65% on your capital and you're decently young, you will earn back that money very quickly. And I think to put it with a twinkle in my eye, I think that we have to educate everybody to calculate interest on interest.
Yes. And I think you're right. Okay. That's all my questions. Thank you very much.
Thank you. And our next question comes from the line of Matt Lilienrol from Handelsbanken. Please go ahead. Your line is now open.
Yes. Good morning. Just a couple of follow ups, I think, as a starter. In terms of NII, if we have the full rate hike to be get it probably, was there anything else that draw NII in the quarter? Because we were obviously very way off in terms of our forecast for NII and we did see the rate hike.
Was there anything else that affected NII positively? And how sustainable could we see it going forward?
Well, small changes, of course. But I would say, no, overall, no, there wasn't any other large effect on the NII. So I guess you underestimated the effect on our bond portfolio.
Yes. Okay. Thank you. And on the cost in relation to savings capital, the target of 16%. Have you said anything regarding the time frame of that?
Or is it still relatively open?
No, we haven't set any time frame on that. It's still relatively open. But of course, it's in the foreseeable future.
Okay. And then I guess, yes, very philosophical or follow-up or where you put it. But if you say that mortgages is turning away from being a relationship product to be about product and we see this change in the or not change in terms of pension products. What else could we expect? Do you have any news to share with us where when we can expect other product launches or anything going forward that could further drive income and stability?
Nice try.
Nice try. I could give you this much that we never disclosed what we're going to launch, but I think that we had a, from my perspective, fantastic first half year, comes to innovation, time to market. And I'm very confident that the next six months will be in line of that. So we have a lot of exciting things in our portfolio going forward.
Okay. Looking forward to that then. Okay. Thank
you. Thank you.
Thank you. Okay. And it looks like there are no more questions registered at this time. So I'll hand the call back to you, speakers, for your closing comments.
Okay. Thank you very much. And I hope you all get a great summer and some vacation, and take care of yourselves. Thank you.
Thank you. Bye bye.
And this now concludes our conference call. Thank you all for attending. You may now disconnect your