Okay. Well, welcome, and thank you for listening in. It's Richard Jussason, the CEO of Anzac Speaking. I will give a business update of Anzac's Q3, and then I will hand over to Birgitte for a bit more on the financial side. As you remember in July, I said that the Q2 was a tough quarter.
We were not happy with our performance. I think that we have taken good steps in the Q3. The net inflow is 73% better than in Q2 and 42% better than in Q3 last year. So we are happy with the net inflows. And an important part of that is that in the Q2, the net inflow was only 28% by existing clients, and we usually say that half of our new flows is from existing clients.
And in the Q3, it was back to normal level at 48%. And also, we could see the customer growth coming back due to July with good corporate reports. I think the activity among clients, people coming back from vacation in August, which was a good month for new customers. So all in all, it was quite a good quarter both in flows and in number of new clients. And if you look at the next slide, I think it's an important part of Avanza's development and this is just an example how we have enhanced the experience of placing a fund order, which also shows that the customer who are starting to buy a new to fund the turn the rate of the customer who completes the process has gone up quite a lot just because this in some sense, simple improvement.
And I think this is an important part of Avanza going forward is that we release a lot of new products and services and we enhance the customer experience, but we also take a very deep look in the mirror and looking at the existing processes offering services that we have. And we can see that by improving those existing processes, we can make the customer activity go up and the customer experience go up. So we have a lot of housekeeping to do in keeping even better services. Another interesting thing that we can see is, of course, that the customers more consume Avanxo in the mobile format. And now that we move, for example, maybe possible for our customer to transfer funds from other banks to Avanza in the mobile apps.
So the 4 out of 10 transfers is done in the mobile phone, which is a dramatic change just because we put the services in there. And I will not dig into the details, but we have placed more and more services in the mobile phone, and we see a great appreciation by our clients of that. And 30% of our clients today only interact with Avanza through a mobile phone. So the mobile has come to stay and it's one of the areas where we are improving ourselves and we intend to improve ourselves even more going further. If you take the next slide, also one of the example of the product launches we did is we launched our global index fund, which is actually the cheapest index fund in the world with a 5 basis points management fee in total cost for customer, 10 points.
It's now the 5th most popular fund to own Avanza. We have 50,000 owners of the fund. But an important part, which shows that the product launch like this works quite well, is that 90% of the money new clients bring into the company is investing in other products than the global fund. So and also existing customers, the cannibalization of other funds with higher margins is surprisingly low. So we can see that the fund is relevant for a customer who invest in it, but they don't only invest in this fund.
And I think that you can see some similarities to the launching of Avan Safero in 2006. So we are very happy with that. We also in 3rd October, so that will be in Q4, launched our new margin lending product, which is too early days to comment on the success of it, but we can see that the customer really appreciated a number of customer who wants to have some moderate margin lending on their portfolio has increased a lot. So I think we're very, very happy with that. But it's too early days to conclude the long term effects on that.
If you take the next slide, we also can see that the activity has transferred into increasing market shares in number of transactions, the stock exchange. And that is, of course, important for us because the larger market share we have in transaction, the better terms we can get and the more we can give extremely good prices to our customers. So it's something that we follow quite carefully. And in the last quarter, we are very happy with the development. And we can also see that the activity from foreign players have decreased.
And if you take the next slide, it's also a piece of our strategy, and it shows the income split with Avanza. And as you can see, the red is brokerage income. Q3 was a good brokerage quarter for us, but the proof is in the pudding and the strategy that we have is to create more recurring income. And we see quarter by quarter now that the mutual fund income is stable and increasing, which is part of the strategy of taking down some of the top line volatility with the Palazzo. But we will always have volatility in the brokerage income and we love brokerage income, but we want to grow other income as well.
Other income, I think, yes, Brigitte will come back to a little more in detail, but I think the slide shows that our strategy actually works. As always, for Avanza, the key success factor for us is customer satisfaction. We will get the result from the ESCOI measurement in, I think, December, and we think that our customers still appreciate such a loss. That's the signs we have. We want to continue growth in both number and customers and volumes since I think Q3 was quite good and create possibility for strong innovation.
And as we said in Q2, we took the decision competition, but with our values, we are surprisingly happy to see the attraction that we have as an employer and that we are attracting a lot of new talent and we are onboarding a lot of new people because we have some replacements also. So I think we are at the moment recruiting around 30, 40 people and our employee branding has been successful. So we are getting a lot of new talent within the company who wants to share the culture and the values that we buy this company upon. And that's very, very satisfactory from my point of view. With those words, I would like to hand the over to Brigitte and go through the financials.
Thank you, Vikas. And as always, we start with the financial overview. The revenues for the quarter have increased as a result of the higher customer activity, both compared to Q2 and Q3 last year. Due to growth in savings capital, though, we can see that revenue per savings capital is flat. Costs are seasonally low in Q3, which is it seems compared to Q2.
And for the 9 month period, the cost growth has slowed down even and it will slow down even more for the full year. Cost per savings capital was down to 17 basis points in Q3 and slightly down compared to last year and flat at 19 bps for the 9 month period. And we believe that we can reach below 20 basis points also for the full year given, of course, continued strong growth in customers and service capital. The operating profit increased both quarter on quarter and year on year. You can see that the net was affected by higher tax expenses in Q3 due to higher tax on intermediate commissions, a decision from the Swedish Tax Agency, which we communicated already in the Q2 report.
Another effect on the tax is that the operating profit in the bank in relation to our insurance company was higher than in Q2, which gives an underlying higher tax rate for the group in the quarter. This is due both to growth in savings capital within the bank versus the insurance company, but also an effect of increased lending, which is only a banking product. We can also see that the operating margin rose to 49% in the quarter, but was 0.4% for the non last period. If you take a little bit more look at the revenues, total revenues were up 10% quarter on quarter and 18% compared to Q333 last year. The market environment improved from without Q2 and leading to increasing brokerage income.
And then we can see that the customer activity has increased and more customers made share transactions in the quarter, commission generating notes were up significantly, Perno borrowing commission generating notes was higher in relation to Q2 and mainly flat compared to the same period last year. More customers trade, but at lower volumes per trade. And the largest share of the trades were made within the lower brokerage classes. And this means that in these classes, we have higher brokerage revenue per tonne of the Chroma. Another effect is that during this quarter, we had 6 more trading days compared the last quarter.
If we look at some of the commissions, as I said, we had a continued increase. We had good net inflow and growth in capital, which means our savings capital in farms have been increased by 19% during the year. Fund savings now account for 29% of total savings capital and 30% of the revenues as Rick had showed you just a few minutes ago. And funds from issuance per pound capital were flat at 35 basis points compared to previous quarter and slightly higher compared to last year. And the auto funds that we launched a year ago are now one of the most popular products for monthly savings.
The NII increased mainly due to increased lending and lower costs for state deposit guarantees than we previously estimated. The mortgage lending continued to increase. Margin lending also increased, reflected by the more positive market sentiment. The improvements that we have made in the margin lending in Q4 are not expected to have material impact. Majority of the capital is in standard rate, and the volume growth required to reach breakeven are not that large.
Costs for surplus liquidity increased slightly, as deposits were higher and stevo was about flat compared to Q2. Compared to Q3 last year, the NII increased mainly due to higher leveling but also due to lower costs for surplus liquidity. And other income are seasonally low in Q3 due to less transactions within Corporate Finance. And during the Q1, though, we have seen that the equity trading in foreign markets has increased among our customers and now accounted for more than 10% of the turnover. Trading in foreign funds are though slightly lower.
The revenues in Avanxo markets are a bit up compared to Q2. So looking at the cost side, operating expenses increased by 12% compared to Q2, which is mainly due to seasonally low personnel costs. Compared to Q3 last year, costs were higher and 9% higher mainly due to higher personnel costs and higher costs for premises. Attributable to the capacity expansion that we started in 2017. The cost growth for the 9 month period was 16% compared to 20% for the 1st 6 months.
The costs are estimated to come down to close to 11% for the full year, of course, dependent on how quickly we can onboard our new employees and get them in place. We still have a strong capital situation with a total capital ratio of 18.9, which is well over the capital requirements of 15.8, which includes all external and internal buffers and as well as Pillar 2 requirements. And as you know, we continue to have our dividend policy of paying up 70% of the results. And with that, Viker, I think we can open up for questions. Yes.
Please stop asking your questions.
Thank you, ladies and gentlemen. Our first question comes from the line of Petr Kosyakov from SEB. Please go ahead. Your line is now open.
Yes. Hi. Thank you. I will start to ask my questions. One or a few questions.
The first one is on the commission rate classes that you have and the changes that you made. I think it was during end September, early October where the monthly limitation on class changes is removed. Have you seen any impact from that, people switching more and perhaps having the more optimal commission rates during each single trade?
No. I think we have the customers gave us great credit for doing that, but the number of customers who actually change a class every day is really limited. So I see no effects of that.
Okay. So you would not expect at this point at least, sorry, any decline in average commission rate on the back of this?
No, not on the back of that.
Okay. Then correct me if I maybe I heard wrong here, but did you mention that I think it was Jibbito that mentioned that the government fees were lower in the quarter or lower than you expected in the quarter? Did you have some some what was the impact of that? And how much relates to the previous quarters?
I think that we made an adjustment for previous quarter of about SEK 1,000,000 or SEK 2,000,000 or something like that. And in this I mean, we don't get the calculations regarding the state deposit guarantee until in the Q3 for the existing year. So that's why we estimate the costs in the beginning of the year and then we have to change it when we get the final invoice from Ringstender.
Okay. So but so in essence, maybe SEK 1,000,000 should be removed from the NII in this quarter relating to the other okay. Then just on the mortgage lending plus offer with Stabilo where the rate was lowered quite recently. What's your what was the reason behind that? And are you kind of with the volume growth that you're seeing within that mortgage loan?
The reasoning for this is that you overdraft prices in your offering to clients. We're quite happy with the development and with the volumes. We see that the processes are working. And as I said previously, this is a marathon. We're just starting.
We always adjust our offerings. But so it's according to plan. And sometimes you lower the rate, sometimes you increase rates. And this time, we had an opportunity to lower the 4 basis points, and we did so.
Okay. But in essence, you're kind of happy with this growth rate also going into 2019 and it's in line with your expectations. Is that how I should read it?
No, we don't disclose how we think about 2019 when it comes to growth. I do think that we launched this offering in, I think, it was April 6 or something like that. And we are still adjusting processes making the U. S. Experience and so on.
So I think we are a bit too early days still to conclude any thing that we are planning to do. But as I have said previously, this is a long term commitment from Haran Singh to the mortgage market and quality user experience is on the agenda more than short term growth.
Okay. And then just one last question more on the technical side, but coming back to the tax rate, which you mentioned was higher in the quarter on the back of more profits being generated in the bank. If we go if we look at the current earnings trends and where profits are growing the most, I would assume it's within the bank. And on the back of that, we should expect a gradually higher tax rate for the coming years. Is that fair to assume?
And then I exclude kind of the tax changes that we're the corporate tax changes that we're getting in Sweden. But implicitly, down underlying tax rate should be gradually increasing. Is that it?
Well, what we see is that more net inflows are coming into the ISK compared to the endowment insurance. So that drives savings capital to the bank rather than into the insurance company. On the other hand, we have insurance company with the occupational pension, which are growing. So of course, within the fund only in the occupational pension, you usually have more or less 95% or something like that in funds. So of course, we see growth in the insurance company when it comes to occupational pension, but the ISK are taking more savings than the endowment insurance, I believe.
And as I said, also the lending products are purely banking products. So of course, when the NII increases, its revenues will stay within the bank.
Okay. Thank you very much. I think I'll stop there for now. Thanks.
Thank you. Our next question comes from the line of Nicolas Macbeth from DNB. Please go ahead. Your line is now open.
Thank you. So first, a question on the product launch pipeline. You mentioned 2 new products, the Global Index Fund and the new margin loan. Is this it? I mean, you've been speaking about a quite ambitious pipeline and a lot of investments coming into new products.
Should we expect more here in Q4 or early next year? Or was this the kind of products you've been speaking about in recent quarters?
No. I think you can expect more from us, both when it comes to services, product improvements, as I mentioned during the presentation, that we are increasing our offering in the mobile phone and so forth. So we still have some things left in our goody bag.
Okay. And then a question on the NII sensitivity. You kept your guidance, dollars 2 €250,000,000 How should we think about the gradual impact here? Should we take 25% of that as the NII delta from an initial rate hike if the first rate hike is 25 basis points? Or how should we think about the first impacts from rate hikes, let's say, if they come now maybe in December February?
Well, as we said before, we have a fewer when it comes to our mortgage loan. So the first 30 basis points won't impact those revenues. The margin lending product is a decision. It's not closely connected to the rental rate. So that needs a decision from us.
And when it comes to our bond portfolio, we have a 3 month rate when the rate is resetting in the mortgage front and on an average 1.5 months. So you will have a the effect won't impact the NII immediately. But you have different and then on the quarter, the part that we have lended to our credit institutions are closely connected to the reference.
Okay. And then also I think you mentioned some data early in the call. I think I missed the details here, Richard. But could you please repeat the inflow split here from new and existing clients?
In Q2, the inflows from existing clients was 28%. And normally the inflows from existing client is around 50%. And in Q3, the inflow from existing clients was 48%. So the existing clients started putting money into Avanxo again, which they're not doing in that extent during Q2.
Okay. And then final question. If you have any reflections on the kind of turmoil that's been written about your closest competitor, Nodenet, in media here in the Q3, Do you see any kind of potential impact on the competitive environment? Or have you noticed any customer flows from Nodenet on the back of this thermode?
No, we don't comment on Nodet. We respect them as a colleague and a competitor in the business, and I have no further comments on that.
Okay. Yes, that's all my questions. Thank you.
Thank you. Our next Our next question comes from the line of Matt Lindel from Handelsbanken.
Yes, I also had a question related to the NII sensitivity. So the correct thinking here is that it will be more a progressive scale. So if we see 1 big stable going from minus 50 to minus 25 or flat, we should see that as a very limited impact. And then I wonder if you have have you done any sort of analysis on if you expect clients to sort of put more into deposit accounts or if you and then cannibalizing on the other savings products when this happen or if you have been thinking about that? And then the second question is, I guess, more on we see that commissions portrayed now at least were stabilizing.
How if you can comment how you see price pressure in the market? Thanks.
Well, when it comes to the NII sensitivity, of course, you will see an impact if the rest of it will be raised even though you have some delay when actually hitting the NII. So then you have the second question, I forgot to ask the robot. What's that?
No. It's more on we thought that commissions per trade were flat in the quarter. And I mean do you have you seen that price pressure is abating a little bit in the market? Or how do you see this going forward?
I think that we see we always see competition. But I mean, at the moment, I think the price levels are quite stable. And in the midterm future, I don't see price being the most competitive tool used in the market by the different players.
Okay. Thank you.
Thank you. Our next question comes from the line of Jan Halyen from Carnegie. Please go ahead. Your line is now open.
Yes. Thank you. Good morning. It's Jan here. Three questions from me.
First, yes, 2 that I understood you correctly on the costs. It sounded like you were confident or very confident that you would get down close to 11%. Is this probably an indication that you think you will end up above the 11%, I. E. Somewhere between where you are now and the 11% or today?
We haven't changed our cost guidance since Q2. So it's the same. And as you said already in Q2, this is an increase depending on how fast we can get the new employees within the company. So of course, there are some uncertainties whether it should be actually 11% or somewhere just under that or over that.
Okay. Fine. I guess quickly on the margin lending. I think previously, it's been more behavioral aspects of Swedish customers that has been limiting the volumes. Do you expect to see a change that the Swedes will start doing margin lending or using the shares as collateral for these types of loans and that you have a 0% rate?
Do you think it's going to be significant?
I wouldn't say significant, but I would say it will increase. I think more and more people will be I think that more people will start using them when they come to managing their portfolios, but I don't think it will dramatically increase that everybody will start lending on the portfolios. But of course, we also will see margin lending in other price classes than the fair one. So I think that people are letting their eyes on the effects you can have by leveraging your portfolio. So of course, in the long term, we believe that our margin lending will go up.
And it's also due to the market environment. When the markets are good and equities are increasing in price, margin lending increases. And when markets are down, margin lending decreases. So but I think more people will add that tool in the portfolio to be ready for different market conditions.
Okay. So perhaps we should see this as a maybe not a marathon, but a half marathon to use your NanoJ on study? Yes. I think it will
be the 3,000 hurdle or something like that.
Okay. Perfect. And then I guess on the tax, yes, getting back to the tax, you guided for no meter tax rate of between 14% 15%. Did you say that, that remains the case despite the move from insurance into bank? Or do you expect that range to change?
Well, in the near future, I would definitely say that it's still between 14% 15%. And then, of course, it depends on the growth that we have and where we get the growth, if we get the growth within the bank or within the insurance companies.
Okay. But in the sort of next few quarters, you don't expect that range to change No. Okay. If I may, just a final comment. In the CEO comment, you talked about the challenges or the stickiness in the moving your pensions.
And of course, we've been talking about that for a long time. But do you see any change? Or is it just everything on hold, not that we haven't lived in a political mess?
I think some things that have happened is that we were expected to get a new legislation in Sweden this summer, and it didn't come through. A lot of talk from politicians and the help that we thought that we were going to get from change regulation didn't come in place. 2nd of all, I think we are having activities to help our customer move the pension. The effect is not up to my expectations yet. I have to be honest about that.
And the third thing is that we don't have a government. You don't know who to lobby on. So I think the question will not be debated within the in the politics in Sweden before we have settled down and have a government in place, and who knows when that will be.
Okay. And thank you very much. That's all for me.
Thank you. Our next question comes from the line of Ermin Kerik from Nordea. Please go ahead. Your line is now open.
Thank you and good morning. I think most of my questions have already been asked. But I just found your comment interesting regarding you taking market share on the NASDAQ transactions. I think you said that if you take a higher market share, you can get a better price, which you can then offer to your clients. Is that how we should think about it, that if you see improvements there, you will pass that on to the end consumer?
I think that if we get better prices, better margins on our products, we create a greater profit. Management decision by Avanza. And I think that's That's a management decision by Avanza. And I think that's more connected to if the comments that I did earlier in different situation is that if we see that our operating margin is above 50% quarter by quarter, then I think we will ask ourselves, can we invest more or pass it on to the customer? And that will be one component in that puzzle, so to speak.
Okay. That's very clear. That's actually everything for me. Thank you.
Thank you. There are no current questions at this time. I'll hand the call back to you speakers.
Okay. Thank you very much and looking forward to talking to you all again in January.
Bye bye. Bye bye.