Okay, thank you very much, thank you for coming into this conference call today. If we look at slide number two, which is performance on targets 2018, I can conclude that we achieved one of our most important goals, the most satisfied client. Another important goal for us during the year has also been to increase the employee satisfaction index from 33 - 44, which is very close to our target 45. It is arguably a very high number, I think that has been a focus for me and the management team, and we are very satisfied with that development. On the cost side, I'll come back today, we landed on 11% increase as guided for the Q2 report.
The goal to reach a million accounts 2020, we are almost at 840,000 for the full year 2018, which means that we are well on track with that. One goal that we did not achieve, of course, is that our cost growth has been 11% and our income stream has been 8%. I think we have over the past years done a lot in investment in further growth, I think it over time will pay off. The board is also proposing the same dividend as last year, 10.55 SEK, which is 83% of the profit. Of course, the focus going forward is a lot on development issues. If you move to the slide number three, it summarizes the year a little bit that the net inflow was 3% up 2018 to 2017. We added around 125,000 new customers.
We can see a pattern that existing clients in the turmoil that we have seen in the market is not depositing as much new money as the new clients are doing. We still are quite happy with the customer growth. The customer growth has been a little bit less for the year than it was the previous year, I think that my experience tells me that the retail clients in a shaky, uncertain market are more hesitant to start doing things when the market looks good, everything is fine, people are entering income and doing a lot of things. I think there's been, so to speak, a bad weather time during the year. We also have added 75 new employees during 2018. Of course, that's both replacement of staff that has left us, but also new staff.
I think it's important to stress the fact that the recruitment of new talent into the company has gone very well, I think we are scaling up our capabilities of being able to enhance our development. That is also one of the reasons that we are cost guiding our 9%-12% of increase costs for the year, we're also disclosing our cost budget which is 10.5% increase from 2019 to 2018. I think it's important to understand that staff-related cost in Avanza is in the excess of 70% of our cost. Our business model is that we do everything developing from back end to front end to UX design and to maintaining our system in-house. The scalability of development is fairly close related to the number of employees.
Since we have high ambitions for new projects, new services, new products, and we also are broadening our offerings with different things, I think it's very vital for us to actually increase the staff a little bit to be able to get quicker time to market and launch more products and services to our clients. I think the year also gave us some confidence in the end of the year when we won the Swedish Quality Index Award for best satisfaction of clients. I think we also got the Bank of the Year award from a Swedish well-respected newspaper. I think actually this morning that is another two when it comes to brand recognition in the financial industry. I think all in all, our position is quite good even though the markets, and I will come back to Q4, has really been turmoil.
If we change the slide to number four, we can also see that we are still growing a lot in the younger customer segment or the younger you see the 20+. The important factor there is that we know that our customers on average have a little bit higher education than the general population, and we are growing in the urban area, and that means that the customers will also over time make more money, make more savings. I think that's important. I also think that if you look here at for one thing that we have invested a lot in is our fund business which of course in line with creating more recurring income. The number of customers who have monthly savings automatically in Avanza increased by 24% during 2018, which is of course very good news.
I think where we can improve ourselves in our business, and I said that before, is share of wallet. We know that a lot of Avanza customers have assets in other banks, which we could be better at gathering, and that will of course lead to higher product penetration. If you go to the next slide, which is a bit more summarizing data, the Q4, we can see that the Q4, we had the stock exchange fell with 14%. We've seen a lot of customers getting risk down. Being on the selling side, we have seen that our deposit has grown. That means that our customers in general have a lot of liquidity at the moment, so to speak, on the sideline waiting to be invested.
The relative share of money markets fund to stock fund has been increasing. I would stress the fact that we're still happy with our development in our fund business. Of course, a lot of the customers have taken down risk during Q4, which of course is hurting us from a PNL perspective. We can also see that during Q4, as I said before, also the inflows from existing clients was 40% in Q4, it was 48% in Q3, that is, so to speak, stressing the fact that the customers are very hesitant to do a lot of things. At the same time, we've seen that our pro customers and our private banking customers have been doing a lot of business with us during the quarter.
If you go to the next slide, which would be the market share in the stock exchange, we dropped a little bit in number of transactions, we don't think that's a worrying sign yet, because we can see that the institutions that have increased their activity in Stockholm exchange during the quarter has been the four international institutions, which is, so to speak, a sign that we are still the number one player when it comes to transactions in the Stockholm exchange. I would also stress the fact that we are on the strategy of creating more recurrent income to mitigate market fluctuations. Of course, we are in it for the long run. Stabelo Global Class is one part of it. Investing in the fund business is another part of it. Of course, we have previously discussed the net fees on income.
That is, of course, something that looks a little bit better with the rate increase, even though it has no significant effect yet. I also stress the fact that when it comes to our cost guidance in 9%-12%, we also add a goal to the company that we want to have 16 euros per cost to savings capital ratio, and we have 20 today. The reason we have chosen 16 is that we can see that the best international players are there, and that those are the ones that we operationally compare ourselves with. A quarter with a lot of challenges. We think that we handled them quite well.
We can see those when we're commenting on the full year that the first six months we did a lot of work with MiFID and GDPR and a lot of legal investments, so to speak, or regulatory investment. We've also seen after summer that we did a lot of exciting product launches. We launched the world's cheapest global index fund. Of course, the timing was not 100%. We did it the 26th of August, and we all know what happened to a global index fund from the 26th of August until now. Our margin lending renovation, which we launched on October 3rd, is also a product that works much better in an upgoing market than a down-going market. As you know, from October has not been very nice weather when it comes to financial markets.
Over the long term, we think that those investments will pay off quite handsomely. With those words, I leave it over to you, Birgitta.
Thank you very much, Rikard. Let's start with an overview. Revenues were in line with the previous quarter, up 8% compared to the full year 2017. Our full-year cost growth was 11.1%, in line with our cost guidance. Cost/loss is really low in Q3, which you can see in the comparison with Q4. Operating profit increased by 3% compared to 2017, decreased quarter-on-quarter. The operating margin dropped to 42% in the quarter, was at 43% for the full year, down from 45% in 2017, as a result of investments in further growth. In the Q3, net profit was affected by a one-off tax cost related to the Swedish Tax Agency's decision to tax our insurance company in Sweden, also retroactively for 2016 and 2017.
It is also the reason why the tax rate was about 15% for 2018 compared to 14% in 2017. We believe that for 2019, we expect the tax rate to be somewhere in between these two figures. With a higher average savings capital, revenues per savings capital decreased compared to the full year 2017 and was basically flat quarter-on-quarter. Cost per savings capital was unchanged, 20- basis points, for the full year, despite increased costs. Our long-term ambition is to lower the cost per savings capital close to 16- basis points, as Rikard just mentioned. It's of course a tough target, achievable and in line with the best international peers. During the quarter, we increased our holding in Stabelo to nearly 30% from just under 20%. Stabelo is therefore now classified as an associated company in Avanza accounts.
Our share of Stabelo's results are included in the consolidated accounts. This has only had a marginal effect on the net profit, even though we are convinced this is a good investment long-term. Looking at the quarterly revenues, you can see that the revenues were flat quarter-on-quarter and slightly down compared to Q4 last year. Net brokerage income was stable quarter-to-quarter despite fewer trading days. Brokerage-generating notes went down while turnover was basically unchanged. Brokerage income for turnover fell marginally. Compared to Q4 2017, when brokerage income was at record high levels boosted by the high trading in certificates, net brokerage fell by 9%. Fund commissions decreased 9% quarter-on-quarter, we rose by 14% year-on-year. During the quarter, we have seen negative growth in fund cash flow due to market downturn and customers' high-risk aversion.
This led to a fund outflow which affected our fund commissions negatively, of course. Fund commissions per fund capital decreased slightly to 33- basis points annualized due to lower share of equity and sector funds. Compared to Q4 last year, fund commissions per fund capital was flat. Our fund savings account now for 27% of the total savings capital and 28% of the revenues. NII decreased quarter-on-quarter, mainly due to lower average interest rate on margin lending, also due to higher costs for deposit guarantee scheme, where we had a positive one-off effect in Q3. Compared to Q4 last year, the NII increased by 11%, mainly due to higher income from external deposit accounts, also higher mortgage lending. Costs for surplus liquidity was slightly lower. The 25- basis point raise in January will not have full impact.
It has no impact on the mortgage for private banking customers and the margin lending product which is not directly tied to the repo rate, and instead is adjusted by overall interest rate levels and the competition. All else being well, and without taking any changes in our customers' behavior into account, a one percentage point increase in the interest rate with today's volume would affect full year NII by over SEK 250 million. Other income increased by 19% quarter-on-quarter, mainly due to higher income from corporate finance, which is seasonally low in Q3. Income from Avanza Markets also increased, while currency-related income decreased due to lower trade in foreign funds. Compared to Q4 last year, currency-related income was fairly flat, whereas income from Avanza Markets rose by over 30%.
The share of equity trading in foreign markets decreased slightly among Avanza customers and capped at 10% of the turnover. Year-on-year, other income decreased by 9%, mainly due to significantly higher income from corporate finance in Q4 2017. If you look at the annual development, we can see on a full year comparison that revenues increased mainly as a result of higher fund commissions due to strong fund inflows. Fund commissions were up 26%, in line with Avanza's growth ambitions to increase the share of more stable income to grow in broader customer groups. Net brokerage income decreased due to lower turnover in brokerage-generating notes and higher transaction costs for foreign trading. The number of brokerage-generating customers and notes increased, but customers are trading in lower volumes and in lower commission caps. Brokerage income turnover was 2- basis points higher than in 2017.
NII increased mainly due to higher lending. The average STIBOR rate was 11 basis points higher than last year, which resulted in lower cost for surplus liquidity. Higher resolution and deposit fee rates cost us SEK 3 million. Other income was up due to increased trading in foreign stocks. Also, income from Avanza Markets was higher, whereas the revenue from corporate finance was down compared to 2017. If we look at the costs, the costs increased 15% quarter-on-quarter, which is mainly due to the seasonally low personal costs in Q3. If you compare to Q4 last year, costs decreased by 2% due to lower marketing expenses. If you look at the annual cost development, you can see that the full year comparison costs were up just over 11%, which is in line with our guidance. This is a result of higher stock costs and higher other expenses.
We during the year have expanded our development capacity and increased the office space. Other expenses also rose due to higher IT costs associated with the regulatory changes. The annual cost increase going forward is, as Rikard already mentioned, estimated at 9%-12%, a slightly wider range than the previous we had guided for of 8%-10%. This gives us the flexibility to take advantages of future growth opportunities as customer behavior and expectation changes. We will though, continue to have a strong focus on costs. We make carefully cost budgets and prognosis three times a year, and the current budget figure for 2019 shows 10.5% cost growth, where the bulk is increased personnel and IT costs.
Capitalization is still strong with a total capital ratio of 19.8%, which is well over the capital requirement of 15.8%, which includes all external and internal buffers and Pillar two requirements. In Q4, the risk exposure amount has increased due to higher operational risk amount, which is based on the revenues from the last two years and now includes 2018. Credit risk amount with institutions lowered with the temporary deposit of surplus liquidity at the Riksbank. This has had a temporary effect on the LCR ratio as well, which reached eight at year-end, but will return to about two, although we see we'll be well over the requirement of 1. The proposed dividend for 2018 is SEK 10.56 per share in total SEK 300 million, representing a payout ratio of 83%. With that, Rikard, I think we can open up for questions.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad and you'll enter a queue. Our first question comes from the line of Ermin Keric from Nordea. Please go ahead.
Thank you, and thanks for taking my questions. First question, my order was a bit poor, so apologies for maybe some repetition here, but how should we think about sensitivity to the first 25- basis points rate hike increase or repo rate increases from the Riksbank?
The rate hike that we had and which came into place in January this year we have no impact on our own private banking mortgage loan. The impact on our margin lending, that is a management decision. It's not one-to-one effect on that. Otherwise, when it comes to the liquidity and the bond portfolio, it will have a full effect, but with one and a half or something like that amount delay.
Okay. Thank you. That's clear. Also you're talking about the cost per savings unit. Could you say something about how you see the trend going forward for the income per savings units?
Well, I guess that's harder to predict since it depends so much on both, of course, the market and how much the volatility and trading on the market will be and, of course, the increase in our customer base and in savings capital. Of course, we are broadening our customer base with the newer type of customers, not as trading intensive, but on the other hand, they usually invest in funds which are more sticky and so forth. It's harder to have a strong thought about the revenues to savings capital, I would say. Rikard, I don't know whether you would like to
I think that we don't really guide about that. I think there are so many factors that could affect that number. I think generally speaking, as we concluded, it's a lot about creating recurring income, which I think a fund business is approved of. As you see in Q4, of course, it was a bit of turmoil when it comes to funds because people reallocating. Giving long-term, I still think that the fund recurring income is extremely important for Avanza.
Understood. Thank you. Just a final question, if we're staying on the fund capital, could you give us any flavor for how much of the fund capital is invested in equities and in other asset classes? Also the decrease in Q4, how much of that was due to performance and how much was outflows? That would be very interesting to know. Thank you.
I don't have the exact number between the different kind of sectors, but I know that about 70% of the downturn on the fund capital was due to market downturn. 30% was due to net outflow, I would say. The split between different kind of funds I don't have.
We know that relatively speaking on money market fund was increasing too, of course, that's an effect of that.
Understood. Thank you.
The next question comes from the line of Maths Liljedahl from Handelsbanken. Please go ahead. Your line is now open.
Yes, good morning. NII sensitivity, I think you covered that. In terms of the costs, how should we think you are pretty firm on the guidance for 2019 of 10.5%, the 9%-12% guidance, should we see that just extracted going forward for 5-10 years? How do you see costs 2020, 2021? How should I think about that? If you could just specify, I saw the move there in operational risk in the quarter. You said it was related to old income levels, or how should I think about operational risk going forward? Thanks.
Well, if we start with the last question, when it comes to operational risk the capital requirement operational risk is calculated based on the three last years' revenue.
Oh, yeah.
We changed that in the Q4. Up till the Q3 it's based on 2017, 2016, and 2015. When we do it in the Q4 , it's 2016, 2017, and 2018. There as the revenues increases, the capital requirement for operational risk will increase.
Okay. Yeah. Thanks.
The first question was?
Yeah, related to cost, how we should think past 2019, like 2020, 2021, and onwards, 9%-12%. Will that be a long-lasting guidance?
Yeah. You started by asking 5-10 years, I would say we don't have that kind of horizon when we are in too fast environments to have that long-term prognosis. I would say that this is a guidance for the year that we can foresee, that we believe that 10.5% we can now have budgeted. As I said, we are doing budgets and prognosis three times a year, it's important for us that the guidance is not the reason for taking on or not taking on the cost. It's the opportunity in the market that will be the reason for us taking on the cost. As we have seen for a few years, we still see a lot of opportunities, it's important for us to stay ahead of competitors and so forth.
It's important for us to be here and do what we believe will really increase our growth in the future.
Okay. Thank you.
Next call.
Sorry if I can just add one. Have you said anything about how much you gain from the lower regulation and fees in Q1 now, or around 2019 compared to 2018?
No, we have not done that. What you could see is that the fee for resolution fees going down from 0.125 - 0.09. Of course, it's about 25% going down at the same volumes as now. Of course there will be a decrease, again, it depends on our balance sheet and our customers guarantee the liquidity.
Okay. Thank you.
The next question comes from the line of Peter Klerck-Jakobsen from SEB. Please go ahead.
Yes. Hi. Thanks for that. I have an additional question on the cost side. Apologies for that. I'm just trying to understand, if we look at the previous kind of cost levels or cost growth that you mentioned of 8%-10%, now 9%-12%. If you look at net inflows the last two years, it's been between 10%-11%. You talk about wanting to see the cost to savings capital level declining to 16 basis points from the 20 where you are now roughly. Given now that the new cost guidance implies a higher cost growth annually than, or in line with at least, what the savings inflow has been the last two years, do you look at it that way at all? Do you expect inflows of savings capital to increase with these investments?
I think that the quick answer to that over time we absolutely see that the number of savings capital can increase. As I mentioned before, one of the things that we can improve is share of wallet with existing clients, and of course we have ideas how we can do that. To reach the 16% of savings SEK has a lot to do with a growing of savings capital in our business.
Does that also imply that you expect higher inflow of savings capital going forward than what you have seen the last two years, for instance?
At least that's the ambition.
I think that's the absolute, our ambition to increase the net inflows. Of course, short term, mid-term, that's always a little bit fluctuation from market conditions. If you take the long-term trend, absolutely. We also see that we have a target to get more than 10% of the market growth in savings that has been the market has grown, I think it's 8% over the last 10 years, and we take 10% of the market growth at least. It's also about market share, and we have a market share in savings of about 4% yearly 3.7%. Of course, we want to be increasing our market shares and the effects of that will be, of course, that our savings capital grow.
For you to, in the near term to see your cost to savings capital decreasing you would need to see higher asset value, so implicitly rising equity markets. Is that?
Yes, we would need more net inflow at the higher asset and market values on the assets. Of course, there is always a risk in the short term that if you get the stock market goes down 30% or something, of course that will affect it.
Remember, in basis points won't happen in the nearest year. This is a long-term target that we are going for them. This is a bit away.
Just one question on Stabelo. In the past, I think you mentioned that the total margin on Stabelo is 50- basis points, and then the three participants that are getting a share of that, and you're getting slightly more than one third of that. Is that still the case? Has that changed?
We have never stated that we got more than one third of that.
Okay.
That is provided equally.
Okay. Is that still true? Are you still getting your share of the fees or have they changed?
We have not disclosed how much we make on Stabelo. We will probably do that going forward. We make money on Stabelo from our distribution of mortgages. Of course, it's a volume business. It's a scalable business. Of course, I would say that we make money, we have income, but I think the focus that I have when it comes to Stabelo is growing the volumes.
Okay. Can I just maybe rephrase the question, and see if I get an answer? When you look at the rate cut that was done in the middle of Q4, I think in November, was that investors being willing to lower their return requirement, or was there a change done to the fee that Stabelo is getting?
We don't disclose that.
Okay. That's my questions. Thank you.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. The next question comes from the line of Jens Hallén from Carnegie. Please go ahead.
Yes. Hi, thanks for taking the call. Firstly on cost. One of your targets is costs should not outpace income growth, for now, we've had three years where costs have exceeded revenue growth, now we have pretty high cost increases going into 2019 and onwards. Is this only then, the revenue's only going to be driven by market performance, or is there something you can do to change that? Let's state it another way. How confident are you that you can reach this in the next year?
The question was?
How confident you are that you can reverse the last three years of cost exceeding revenue growth, as one of your long-term targets?
We are very confident in that. If we weren't confident that we will break all the investments we are doing into increasing revenues over time, we would not have done the investments. I'm very confident in that. On that road, I think we have the interest rates, you have market fluctuations, you have the weather conditions in the market that affect us. In the long term, we are very confident in that. I think it's also important, as I said before, that for us to control our cost, it's in one way, not so difficult because our costs are, as I said, in the excess of 70% staff-related. If we were laying people off, lowering the number of employees, we could do that. We believe, and we are 100% certain of that we develop everything else.
We have high staff-related costs due to the kind of business model corporate culture that we have. We also are investing in a broader offering. We also not disclose in what we're investing in. I think you all know that the technology and the opportunities out there, given the new technologies in place, are fantastic opportunities for Avanza, and those are the kinds of the things that we are allocating our staff to work on.
Okay. Maybe after looking at the revenues a little bit. Brokers revenue has been fairly flat or stable per quarter for the last few years. I guess one of the reasons is the brokerage revenue per trade has been coming down. It looks to have stabilized over the last two, three quarters. I just wanted to get your view on that. Is that your opinion as well? Do you expect that to be maintained going forward?
I think the question, what is it?
Revenue per trade to brokerage income per trade looks to have stabilized after having fallen for quite many quarters. Is that your view as well, or do you see any pressure down?
I would say that it has stabilized. I agree with that. I think that it's better to look a little bit more on turnover or brokerage fee per turnover krona, which is about between 9 and 10- basis points. That has been quite stable over time. Another way of answering the question, I don't believe that we will have, in the short to midterm, high pressure on brokerage fees. It can fluctuate a little bit quarter by quarter because you see in Q4 our pro customers and private banking customers were a bit more active than our retail customers. I would say I can see a stabilization that will keep going on forward.
Okay, perfect. Thank you very much.
As there are no further questions, I'll hand back to the speakers.
Okay. If we have no further questions, we thank you for listening in and wish you a very exciting Thursday. Thank you.
Thank you. Bye-bye.