We can see a quarter where strong innovation, we had good customer growth, and very nice outcome and external surveys. Some pieces what we have done during the quarter is that we have launched a new front side, 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 MiFID II reasons. We also have offered more European ETFs. Our customers have welcomed them quite a lot. I think an important part is also that we have launched a site or a part or section on our website for sustainable investments.
Looking at the market going forward, I think the guidance and help the customer wants to make sure that their money is 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 Stabelo, 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 euro 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 even easier for customers in a secure way to log in to the mobile app and conduct their business. A few milestones I think we passed. We have over 900,000 clients, which means that we are on a good way of reaching our goal by 1 million clients of 2020. Survey score, best service in the financial industry. We were awarded that again fifth year in a row. In the recognition, Kantar Sifo survey, we were the most admired bank in the industry and the eighth company total in Sweden. We also won the Lipper Fund Award for Avanza 75, which is our allocation fund especially for pension customers, and it's also the default fund for a lot of pension customers, so that was very satisfying.
If we go to the next slide, we can see the net inflow, and I think this is very promising for us and encouraging. The savings capital is now up to almost SEK 360 billion. The net inflow Q2 compared to Q2 last year was up 71%, and the net inflow was 24% higher than the first six months of 2018. As you can see on the chart, the net inflow, except for January 2018, this 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 billion. I also think that our increased focus on share 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. I think that it's more customers who go through the whole process. 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. The income also outgrew the cost growth in the second quarter and the first quarter 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 full year of 2019. If you go to the next slide, we had a very good quarter when it comes to high customer activity.
We have never had a quarter with so many customers generating broker income for Avanza, even though the turnover was a little bit down. Also number of commission-generating customers and notes were at a record high level. I think that's a promising sign that our customers are very active and the way we are developing our offering is also making our customers more active, and that's a good sign for the future. That activity is something we look very positively on. If you go to the next slide, like we usually show, we keep our position as the number 1 when it comes to number of transactions on the stock exchange. We also can see that turnover, we're number 2 now, declining a little bit, but that's a lot to do with the institutional trading where SEB is 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. All in all, we're keeping our position as the number 1 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 the 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 and the year so far. 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.
You can see on that slide that the fund commissions, which are at a high level now, soon or late, they're going to, so to speak, be at the same level as the brokerage income. At the same time, it's very important to understand that we love brokerage income. 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. We love brokerage. We have more clients than ever who generate brokerage. 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. We believe also that the brokerage income is of high quality, and we like that, but also that the mutual fund income quarter by quarter, the volumes is over SEK 100 billion, it is showing good signs for the future. Going 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 assets under management. We also had SEK 100 billion, as I mentioned, in mutual funds volumes, but we also have a pension company asset under management for the first time surpassing SEK 100 billion is also some of the milestone for us.
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 pay off and is appreciated by our clients. As always, of course, employee engagement is key. 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 Avanza staff is at a record high level, which is of course very promising looking at the things that we have ahead of us after the summer. All in all, I think the strategy is working. I think we are getting where we want to go. I think that the reoccurring income looks good.
Innovation is at a very high level at the moment. We can also see that the important thing that income 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 Birgitta.
Thank you, Rikard. Let's look a little bit on the figures. The revenues, as Rikard said, was all-time high in the quarter, up 6% from Q1, mainly due to higher fund commissions and the higher NII. Comparing the six-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. As Rikard mentioned, if nothing unexpected happens in the next half year, there is 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 one basis point compared to Q1 and down two basis points for the first six period compared to last year. This is mainly due to higher average savings capital. Cost for savings capital was down two basis points to 19 basis points quarter-on-quarter and one basis point year-on-year. Our long-term ambition is to lower the cost for 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 per trading day were the same. Number of commission generating notes were record high, although volume decreased by 12% quarter-on-quarter. Compared to Q2 last year, net brokerage was 14% higher, even though the number of trading days were fewer. Brokerage income per set of 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 classes. Fund commissions increased by 15% quarter-on-quarter, mainly due to higher average fund capital. Income per SEK fund capital rose marginally to 34 basis points, although decreased by close to two basis points to 33 for the first half-year period compared to 2018. This is a result of somewhat higher portion of index funds.
NII increased by 29% quarter-on-quarter, and by 74% year-on-year. This is a result, of course, of the base repo rate in January, and consequently also higher STIBOR, which decreased the cost for our surplus liquidity. Since the bond portfolio is managed at an average interest duration of three months, the interest rate hike was not fully materialized in March, giving a positive yield 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+ 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 net interest income by over SEK 300 million.
Other income increased slightly quarter-on-quarter, mainly due to higher income from corporate finance and lower other commission costs. Income from Avanza Markets was slightly down quarter-on-quarter, and FX were down by 7%, mainly as a result of lower trading in foreign equities. Compared to last year, income from corporate finance was lower, FX-related income slightly down, and income from Avanza Markets increased by 19%. Payment service commissions increased due to trading in foreign securities. Looking at the costs, operating expenses increased by 1% quarter-on-quarter, mainly a result of higher personnel costs. Marketing expenses decreased. Compared to the second quarter 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 half a million SEK per 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 a capital ratio of 16.6% to compare with the capital requirements of 16.1%, 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 for credit risk regarding recovered 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% that is expected to be implemented in June 2021. This ratio is what's going to steer our capital need 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. Our dividend policy will distribute at least 70% of the net profit to shareholders. With that, Rikard, I think we could open up for questions.
Absolutely. Thank you, Birgitta.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press 01 on your telephone keypad, and if you wish to withdraw your question, you may do so by pressing 02 to cancel. There will be a brief pause while questions are being registered. Our first question comes from the line of Ermin Keric from Nordea. Please go ahead. Your line is now open.
Thank you, and good morning. Thanks for taking my questions. The first one is on your budgeted cost increase for 2019 is 10.5%. In the middle of the long-term guidance you've given us of 9%-12%. 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. That, of course, is a decision from our point of view, depending on what opportunities we can see in the future. We are guiding for 9%-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. 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%?
Yeah
Q4 would be-
You will be higher cost growth in Q4 than in Q3.
Okay, thank you. 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. Depends totally on market conditions.
There are no metrics to follow that-
No
I would say for you to see that. Unfortunately, no.
Okay, thank you. Just one final question on Stabelo. If we look now in Q2, the quarter-on-quarter growth is around SEK 800 million, 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 the customers are being more price sensitive. More players in the market has lowered their prices. I wouldn't call it a price war, but I think it's absolutely tougher competition. I think in enhance of that, I think that we one of the players who probably initiated a little bit more of price competition when it comes to mortgages, and I think that's been beneficial for the Swedish consumer. By saying that, I also think that the development of Stabelo is according to our plans and our expectations, but I think that we've been in this market together with Stabelo for a little bit over a year, and I think this is really a marathon to build a good mortgage portfolio. This is a long-term commitment from Avanza.
Okay, thank you. That's all for me.
Thank you. Our next question comes from the line of Patrick Vartanian from ABG. Please go ahead. Your line is now open.
Hi. Thanks for taking my questions. I had just one. You talked about your financial target, that income should grow faster than the cost growth. 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. Which of the income lines will make you reach this target? What is it that we underestimate? What is the potential here?
I would say that what we see is the momentum that we have now with growing net inflows, 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. If this momentum continues, I would say that all the revenue lines will probably exceed the consensus that you can see on our platform. Of course, and as we say, this is a market question because it depends, of course, what happens at the next six months in the market. 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 Birgitta, 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. 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. Thank you. Just a follow-up question on Stabelo as well. Your quarterly net inflow was a little bit more than SEK 800, significantly down compared to Q1. What is a quarterly run rate for Stabelo that you would be satisfied with?
We don't disclose that.
It's closer to the Q1 number compared to Q2? 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 Stabelo.
Okay. Thank you so much.
Thank you. Our next question comes from the line of Peter Kessiakoff from SEB. Please go ahead. Your line is now open.
Hi. Thanks. Peter here. I think I'll start with a follow-up question on Stabelo. Lending grew half the pace roughly that it did a year ago. 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 you have more applications but less conversions to actual loans? Has there been a change to the pricing model between you and Stabelo that means that it's a bigger drag now in Q2 versus Q2 last year?
I would say that it takes a little bit time to administrate new mortgages. Of course, you will probably see the costs before you see the revenues and/or you see the lending volume as well. As you know, Stabelo lowered their interest rates during this quarter, which has been a positive effect on the applications. I would say that, as I said, the costs usually come before the actual volume.
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?
I think that the general answer would be that we did lower to 1.09 in end of November. We had a lot of applications. SBAB lowered to when we increased, since the repo rate increased, SBAB lowered. They had enormous inflows in Q1. We followed down to 1.9 with SBAB, and our applications have been picking up since. I think that's the answer I'd like to give.
Okay.
I think the general comment would probably also that I can see thinking digitalization and the debate about mortgages. Of course, price is becoming more and more a factor and a very good UX experience, and a digital application is becoming more and more important. I think that my personal opinion is that I think that mortgages is becoming more of a product than a relationship product.
Okay. Then just in terms of the profit contribution from Stabelo, I think the losses increased in Q2. Do you have any kind of feel for when you think a breakeven level will be reached? What would you expect 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 depends on Stabelo and what decisions they make regarding their offering. They have only one product or two, if you count the green mortgage as well. Of course, they are in the beginning of their journey and would probably have a lot of things to do in the future. 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 things on Stabelo side in growing those volumes. I think we are on the same boat with Stabelo on that one.
Okay. Over to yourself. In terms of salary inflation, when I look at personal expenses per FTE, it's up 5% year-on-year. I think it was up 6% in Q1. Is that the number that you're seeing in terms of salary inflation?
I wouldn't give guidance on what to think about salary inflation. I would say a general comment is, of course, that we are competing for the talent in the tech industry in Stockholm, of course, that increase will be higher than the general increase in salaries in Sweden as a whole. I think it's impossible in this competitive environment to answer that question.
Okay. Just a final question, which 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 has had any kind of tailwind or any help in the inflow number? 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, I would probably say that it's at least a tail breeze.
Okay. That's good. Thanks for that.
Thank you. Our next question comes from the line of Jens Tjärnlund from Carnegie. Please go ahead. Your line is now open.
Okay, thank you. Just one clarification, then one more broader question, if I may. On NII, just to be clear, is the full effect on the rate hike now visible in the Q2 numbers? If the rate stay the same, is this a normal run rate for the second half of 2019?
Yeah. As we said, I had said before, we had a full effect in March. Definitely for the three months in Q2, we had a full effect of the rate hike. Yes.
Okay. Perfect. Just on pension transfers. Rikard, 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 one 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 they want to enhance the pensioners' future pensions. 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. 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. 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. I think the pension industry in itself is extremely old-fashioned, strong, and it's a little bit David against Goliath in this question. I think the consumers and the citizens of Sweden have to start to understand how much they are paying for nothing.
Okay.
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. I think to put it with a twinkle in my eye, I think that we have to educate everybody to calculate interest on interest.
Yep. I think you're right. Okay, those are all my questions. Thank you very much.
Thank you. Our next question comes from the line of Mats Liljeroos 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 getting probably, was there anything else that drew NII in the quarter? We were obviously way off in terms of our forecast for NII, and we did see the rate hike. Was there anything else that affected NII positively? How sustainable could we see it going forward?
Well, small changes, of course, but I would say in the overall, no, there wasn't any other large effects on the NII. I guess you underestimated the effect on our bond portfolio.
Yeah. Okay. Thank you. On the cost, in relation to savings capital, the target of 16%, have you said anything regarding the timeframe of that, or is it still relatively open?
No, we haven't set any timeframe on that. It's still relatively open, but of course, it's in the foreseeable future.
Okay. Thank you. I guess, yeah, very philosophical or follow up or where you put it. If we say that mortgages is turning away from being a relationship product to be a bulk product, 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 when we can expect other product launches or anything going forward that could further drive income and stability?
Nice try.
Nice try.
Marketing wise.
I could give you this much, that we never disclose what we're going to launch, but I think that we had a, from my perspective, fantastic first half year when it comes to innovation, time to market. I'm very confident that the next six months will be in line of that. 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. Ladies and gentlemen, just to remind you that if you wish to ask a question, please press 01 on your telephone keypad now. There'll be a further pause while questions are being registered. 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.
Thank you very much. I hope you all get a great summer and some vacation. Take care of yourselves. Thank you.
Thank you. Bye-bye.
This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.