Thank you. Welcome everybody to this Q4 presentation. My name is Johan Prom and I'm the CEO of Avanza since November. I will start by giving you a business update, and after that, our Chief Financial Officer, Birgitta Hagenfeldt, will take you through the financials. The overall key messages that we like to go through in this section is that we had a very good and strong performance in 2016 on our journey to make Avanza even more Avanza. The first overall major is that we had a very high business activity and this all comes from unique innovation culture that we have at Avanza, and I will talk you through that in one minute. The second major is also to a couple of key targets, and the outcome of those in 2016, and the conclusion is that we had a very strong performance on our major KPIs.
Thirdly, we will discuss how we are developing according to our business model that is really timeless and built on scale. Especially how we have developed our cost position during the year. Fourthly, we will go through a little bit what will happen going forward and how we will maintain the growth momentum in both customers and the capital, and how we will play and have a focus on core in 2017. Those are the four majors, and I will start to taking you through the first. If we look at what we have done from a business perspective, we have focused on further improve the customer experience in 2016. It's been quite an eventful year and exciting year, both in politics and in the stock market and also here at Avanza.
As you know, our strategy is to have a less expensive and better and easier offering than anyone else. I think we have delivered exactly according to this strategy. What we are doing are really in a very precise way following that overall thought. We had close to 40% more improvement on our website in 2016 versus the year before. This is very much driven from direct feedback from our customers, and we are extremely happy to work so close with our customers and have such direct dialogue with them on how to improve our business. We have radically improved our mobile offering and received very well thoughts and feedback from our customers on that piece. We were also the first to offer free stock trading on the Stockholm Stock Exchange.
Another example of what we do in order to always become less expensive, better, and easier is that we have worked together with Trustly to launch real-time transfers. We have now 100,000 customers that use Trustly year-on-year. Also in our private banking segment, we have improved our offering, and I will get back to later on that we have quite a good momentum and inflow on private banking customers. If we talk a little bit on the very exciting piece on new decision support tools, we have had a couple of major developments during the year. We have the Savings Calculator where customers can see how their savings grow over time, for example, by adjusting contributions and investment horizon and returns. We had the Stock Filters making it possible to quickly select stocks to match a desired investment strategy.
We also launched Avanza Play, that is a new digital decision support tool with videos where we can educate customers and inspire them and encourage them to save. We have had 250,000 views of that since we launched it, which is quite a good number, and we're satisfied with that. As an addition, just a couple of days ago, we launched the Stock generator where we're targeting customers to require support on their investment decisions. Just making it easy for them to select stocks. I think all of this in the area of decision support is a very good description on our continued evolution on developing customer offerings. We actually launch improvements on our websites and on our mobile platforms every second week.
I think this is exactly what Avanza is all about, to continuously fine-tune and making sure that we always push ourselves forward to deliver customer value. If we turn to the unique innovation culture and that we think lays behind all of this, I think that we have had quite a high innovation pace year-on-year. As you can see, this has also been the case in years before because we can see that we have had quite a good journey in recent years on developing new innovations in all years. In current market conditions, we really believe it's really important to continue to drive innovation.
We are here in the 100 years to come, and we have a constant customer focus. We really see a good tailwind in both digitalization and we see the savers are continuously looking for lower fees and more value in their offerings. Also we see regulatory frameworks changing. In all of that, we see that it will be really, really important that we have a high innovation pace given all of the interesting things that are happening in the industry, and that we never, ever lay back and that we are constantly challenging ourselves and questioning and finding new solutions. Actually the overall strategy will remain exactly the same, and the same route that we have taken for the last couple of years. What we will try to do is to actually increase the speed and the preciseness in how we follow that route.
The strategy will remain the same, but we will try to make it even quicker get there and in a more precise way deliver on that overall strategy. Talking on the next major, we will discuss a little bit on the strong performance that we had in 2016 and elaborate a little bit on the overall targets that we set out for the year. We have basically three overall targets that we focus on. We focus on having satisfied customers, satisfied employees, and satisfied shareholders, and we do it in that order. We think that if we have happy customers, we will have that because of our satisfied employees, and those two in combination will deliver happy shareholders. We're extremely satisfied to conclude that we delivered on all of those major KPIs during the year.
We won the SKI for the seventh consecutive year, which is a major thing for us, and we are really proud of making sure that we always focus on our customers and that they view us as a really, really good partner to work with. We have a Net Promoter Score of 70, and we are very happy that the majority of our customers really come on recommendation, which is a major thing for us. We were also the most recommended Swedish brand according to YouGov BrandIndex. Secondly, we are very proud that we have so committed employees, and we have an Employee Net Promoter Score of 51, which is radically higher than the rest of the industry. We had a very good development when it comes to both customer inflow and net inflow.
When it comes to customers, we had 103,000 new customers floating in last year. We had a very strong inflow where we managed to get 9.9% market share on a rolling 12-month basis. I think both of those two latter dimensions we will then raise our ambition for the year to come and years to come, where the new target is to have 1 million customers by 2020 in terms of customers. In terms of net inflow, we have raised the bar to have at least 9% on the net inflow on the Swedish market. We will do a deep dive into areas, first on customers and on inflow.
Just before we do that, I think it's important to conclude that what we have achieved by delivering so good on those targets, it's also that we managed to get a market capitalization to move up the large cap list. I think that is a very good proof that we are on the right way and that we now traded on the large cap list as of January this year. Talking about our customers, I think many of you have seen this chart before, where the red line is the existing customer base and the blue line is the intake that we have. As you can see, we had quite a good intake in our customers in their mid-20s. This is not a new phenomenon, but it's been the same pattern for the last 10 years. The trend has really intensified in the last five years.
I think it's also important to note that we managed to get new customers in basically all age classes during 2016. You can see the green shaded area is the average capital per customer that is developing really a lot over time as the customers get older. Given that we have a churn of only about 1%, which is roughly the mortality in Sweden the long-term 100-year perspective on Avanza is, of course, extremely valid when you look at this slide where we have a very nice intake of young adults, and that the average savings capital is increasing quite a lot over time when we're holding the customer's hand for a long period. I think the second thing that I want to highlight here is also how we manage to get quite a good market penetration on certain market segments.
We have roughly 5.6% market share on the total Swedish population, but we are in a certain segment. If you take men in their mid-30s in Stockholm, we're up over 20%. Of course, we will now look at how we could get that strong position even in other segments working together, focusing, for example, on women and other age classes to make sure that we have a very good and healthy continued growth when it comes to customers. I also previously spoke a little bit of the private banking offering. We managed to get 1,000 new customers on the private banking side. We managed to increase savings capital within the private banking business with 25% in 2016. We also managed to get 3,000 new corporate customers within our pension business. I think overall, we had a very good intake when it comes to customer growth.
The second area we will be diving into is the inflow. If you look at the inflow, we can see that we are on a rolling 12-month basis and this is lagging one quarter, we had 9% intake. Here we will also increase the target going forward from 7% to 9%. Given that scale is so important in our business model, the combination between customer intake and savings capital growth is enormously important for us, and that's why we are so happy that we managed to achieve both of those two major targets in 2016 with 103,000 new customers coming in and SEK 26.5 billion inflow in sales. The third major that I will elaborate a little bit on is our business model and where scale is so important and also how the cost position is a key in that equation.
If you look at our cost position, we are now down at 22 basis points. This is the key for our operating model, where this unique cost position will enable us to have a strategic freedom in playing in various ways. As you can see, over time, we have pushed this down and we think that we will, with increased scale, manage to decrease it even more, where our long-term goal is to reach to 20 basis points. Over time, we have also managed to, given this low-cost position, launch new products and attract new customer segments and price our products in a way so that we could have a lower income to savings capital ratio. You can see that fall to 44%. The whole idea behind our business model is then to get a massive outplay in terms of scale. Those are the green bars.
As you can see, we've managed to increase the savings capital also in 2016. This chart is just showing that our business model is timeless. Also we are playing exactly according to our long-term strategy to earn a little bit less money on each customer with a true and genuine cost position where the scale is the key thing to make our economical model to come into play. We're also happy that we, given this, have an operating margin of 51%, and that is roughly in line with our ambition to have it around 50%. Thank you. If you look at the relationship between long-term savings capital growth and revenue growth, I think it's notable that we managed to, in Q4, have the same type of correlation between savings capital and revenues. Moreover, it's interesting to note that we have a very high interest rate sensitivity.
We're roughly 100 basis points equal, SEK 170 million-SEK 220 million on our P&L. Of course, given the current interest rates, we are very much suffering from that. Therefore we are even more happy to manage to get the good and healthy correlation between revenues and capital also in this quarter. Moving over to the fourth major, we could just conclude that we had a very strong momentum on both customers and capital and basically all of our key targets in 2016. When we move into 2017, our ambition is to continue focus on core and make Avanza even more Avanza. The way we will do that is that we will continue to attract new target groups with more, and that requires a little bit more support in our mobile offerings.
We will maintain to keep our current customers happy with everything that they need and they want. Of course, working massively with our scale. When it comes to the customers, it's a combination of new innovative products and continued world-class customer offerings like the one we've seen in the past. Also world-class user experience both on the desktop and mobile side. When it comes to scale, it's tremendously important for us to maintain our cost efficiency profile, but also making our quality improvements better and reduce our operational risks. We also want to automate as many internal processes as possible to get closer to 100%, to make sure that we continuously push down the cost position. As we said, we're 22 this quarter, and we will get to our long-term goal, 20 basis points.
I think it's very hard if you want to become a true leader to compare yourself to that position. That's why you need to take an own stand on how you want to get there. This is our view of how we will, over time, make Avanza even more Avanza with a combination of focusing even more on new target groups, maintaining our existing core client base, and also in addition to that, increase scale as much as we can. Just to sum things up. I think that we've just been through that 2016 with what's a very high business activity year for Avanza. The reason for that was that we could hold that speed, that unique innovation culture that we have in the company.
We went through that we had a very strong performance on our key targets, both when it comes to customers, inflow, employees, and in 2016. We're happy that we managed to reach all of those targets in 2016. We went through that we have a timeless business model, where the cost position is key, and we managed to get the scale out of it in a very nice way also in 2016. The way to continue to have the growth momentum in both customers and capital in 2017 is a combination of focusing on new and existing customers and also get the scale of it.
If I just put a couple of personal reflections to it, given that I am now almost three months into the job, I think that we have both the vision and the will, and we are all passionate about it at Avanza. I think that's a key component to continue to deliver on our journey. Furthermore, I think we have the customers, the knowledge, and we have a unique cost position that is very hard to copy. We have quite a sweet spot in that perspective when it comes to the rates for the customer and a pole position in winning that race. We have the speed and the flexibility in the organization and the insight of the need of high pace to change.
I think that will be even more important going forward as we see that the entire society, and not least the financial industry will need to adapt very quickly to changes going forward. Furthermore, we have the tailwind from digitalization in the entire society. We have savers that are really asking for our type of value-based offering. We have regulatory changes that we could exploit even more. Given this, I think it's right that we are stepping up our ambitions. Last quarter, we raised our cost guidance for 2017. Now we also as we went through are increasing our long-term targets. I think this is exactly what we should do and what we will do. Our ambition going forward is to make Avanza even more Avanza.
What we have done in 2016 and what we'll do in 2017 is in a very precise way following that route but making it a little bit sharper and a little bit quicker so that we will continue to be the best offering for our customers in a hundred years perspective. With those words, I now hand over to Birgitta to run through the financials for 2016.
Thank you, Johan. The operating profit was strong in 2016, although the income was pressured by the lowered repo rate in February and by lower trading volumes. However, our strong market share in Avanza Markets and increased trading in foreign securities contributed to a higher other income. Operating income amounted to SEK 909 million, a 2% increase from last year. Compared to the fourth quarter last year, operating income was mainly affected by the exceptionally high trading volume in Q4 last year. As a result, operating income decreased by 2% year-on-year. Compared to the third quarter, however, income was 12% higher, improving in all income lines. Cost increased by 8% for the full year according to the guidance and as a result of higher personnel costs, mainly within IT, compliance, and legal. Our cost position, however, was further strengthened as a result of our scalable business model.
The cost-to-savings capital ratio decreased by three basis points year-on-year to 22 basis points. Our ambition to reach below 20 basis points within a few years remains despite our raised cost guidance for 2017 of 15%-20% year-on-year. Compared to the fourth quarter, operating expenses were up 16% year-on-year, mainly due to increased stock costs. This increase was slightly lower than our guidance of about 20% year-on-year as a result of lower IT costs than anticipated. Compared to Q3, which is seasonally low cost-wise, expenses were up 33%. Altogether, this gave us an operating margin of 51% for the full year, in line with our ambition of around 50% and resulting in an earnings per share of SEK 13.45 for the full year.
Total revenues for the fourth quarter decreased year-on-year by 2% to SEK 247 million, increased by 12% quarter-on-quarter. The decrease compared to last year was mainly due to record high brokerage income in 2015. Brokerage income in Q4 decreased by 17% to SEK 122 million year-on-year. This is mainly a result of lower trading volume, even though the number of stock transactions increased by 24% year-on-year, and the number of commission-generating customers rose by 32%. The number of trading active customers has increased due to our stronger customer inflow, but the trades are smaller in volume. This means that more customers are trading equities, but at lower volumes and also in lower brokerage fee classes more suited to their trading patterns. In comparison with last year, the trading volume was also particularly high in a few trading-intensive stocks.
Compared to the third quarter, brokerage income rose by 8% due to higher overall volumes and number of trades, even though the activity per customer was a bit lower. When comparing brokerage income year-on-year, you should also bear in mind that trades in ETPs are from 2016 to the largest extent done in Avanza Markets, meaning these revenues are shown as other income instead of brokerage income. Net interest income, which is the light blue line, was flat compared to Q4 last year and increased by 24% quarter-on-quarter. NII was strengthened thanks to investors' increased risk appetite and our attractive mortgage offering. The repo rate, however, continued to put pressure on NII. The repo rate was on average 15 basis points lower during Q4 compared to the same period last year, and 23 basis points lower for the full year compared to 2015.
All else equal, disregarding changes in customers' behavior, a one percentage point interest rate change would at current volumes imply an effect on Net interest income of SEK 170 million-SEK 220 million. During the quarter, customers invested further in investment funds, which together with the positive market resulted in 25% higher fund commission, which is the light green line. Other income, the dark blue line, increased year-on-year by 24%, mainly as a result of increased FX income due to increased interest for trading in foreign stocks, but also higher commission income from Avanza Markets. Avanza Markets' part of other income amounted to 26% and FX income to 52% in the fourth quarter. Corporate finance revenues were continuously strong year-on-year, and the good corporate climate seems to continue into 2017.
Compared to the third quarter, other income increased by 24%, mainly due to higher revenues for corporate finance, but also as a result of increased trades in foreign stocks. Avanza market share in terms of number of transactions on the Stockholm Stock Exchange and First North for the fourth quarter was 14.6%, which is very high, even if it was down from the record level of 15.2% in Q3, but up from Q4 last year. The market share in terms of turnover was down to 6.5% in the fourth quarter compared to 7.5% in Q3 and 8.7% in Q4 2015. In this graph, you can see the exceptionally high trading activity in Q4 last year. The overall activity on the Stockholm Stock Exchange and First North measured in turnover was down by 8% compared to last year and up 12% in terms of trades.
At the same time, turnover at Avanza was down 2% and trading activity in terms of trades rose by 37%. Looking at brokerage income in relation to turnover, this has increased slightly during the year and also compared to Q3. Total operating expenses in the fourth quarter increased by 16% year-on-year to SEK 130 million. Personnel costs, which is the dark green line, increased by 11% year-on-year. This increase is, as mentioned earlier, mainly due to expansion in our IT development department, but also an effect of increased regulation and more personnel costs within compliance and legal. Compared to last quarter, the personnel costs increased by 34%, which is a seasonal effect due to summer vacation in Q3. Marketing expenses, light green line, was up 18% year-on-year and 120% quarter-on-quarter.
We increased our marketing in Q4 due to the growth momentum we saw and ahead of Q1, which is historically a strong quarter due to net inflow. This was a one-off, and in 2017, we plan to go back to normal levels. Depreciation, the light blue line, are about the same level as last year and compared to the third quarter. Other costs, dark blue line, was up 18% year-on-year and 16% quarter-on-quarter, and this is mainly due to IT costs. The operating expenses for the full year increased by 8% compared to last year. As mentioned earlier, expenses are expected to rise in 2017 by 15%-20% before returning to growth rates of about 8%-10% per year. This is due to increased efforts to maintain or even further improve our growth pace.
The cost increase in 2017 will affect personnel costs as well as IT costs and other costs as our efforts going forward, for example, will include larger premises and increased IT development. Operating profit in the fourth quarter decreased by 17% year-on-year to SEK 117 million. Compared to the third quarter, the profit decreased by 4%. Operating margin was 47% for the quarter. For the full year, the operating margin was 51%, in line with our ambition of a margin of around 50%. Profit after tax in the fourth quarter decreased year-on-year by 15% to SEK 101 million and decreased by 4% compared to Q3. The income per savings capital for 2016 was 44%, a decrease of four basis points compared to last year. It was slightly up from 42% to 44% during Q4.
The cost on the other half of savings capital decreased by two basis points year-on-year to 23 and was 22 basis points for the fourth quarter. Altogether, this is in line with our scalable business model and overall strategy to attract more customers and more savings capital by price leadership. Given continued strong growth in customer and savings capital, we still see good opportunities to lower the cost-to-savings capital ratio to below 20 basis points in a few years, despite the increased cost guidance for next year. The total lending was up 9% during the quarter and 25% since year-end, and amounted to SEK 8.2 billion, where 50% are margin lending and 50% are mortgage loans. Margin lending was up 5% during the quarter and up 8% since year-end and now amounting to SEK 4.1 billion.
We see great demand for our mortgage loan offering and mortgage loan lending was up 13% during the quarter and up 49% since year-end to SEK 4.1 billion. In the quarter, we extended the lending ceiling somewhat to meet customers' demand. Total lending amounted to 3.5% of the total savings capital. Deposits, including external accounts, increased by 1% in Q4 to SEK 35 billion and has since year-end increased by 16%. Deposits stood for 15.2% of our total savings capital by year-end, compared to 15.5% at the end of September. Our covered bonds portfolio decreased by 2% to SEK 13.2 billion during the quarter. However, compared to year-end in 2015, it has increased by 12%, in line with increased deposits. We still have a very strong capitalization and the total capital ratio in the consolidation was 19.9% compared to the requirements, including buffers of 12%.
In June 2016, the countercyclical capital buffer rose from 1% to 1.5% and will in March 2017 rise further to 2%. The Liquidity Coverage Ratio was 3.02 at the end of the period compared to the requirement of 0.7. From January 2017, the requirement will rise to 0.8. To ensure an adequate level for further capital requirements, the board of directors proposes a dividend of SEK 10.5 per share at the same level as last year and corresponding to 79% of our total operating profit in 2016. Our policy, as you know, is at least pay out 70% of our operating profit long term. This strong capital situation entitle us to keep on growing also at a quicker pace. There, Johan, I think we could hand over for questions.
Absolutely.
Thanks.
Do we have any questions from the audience?
Ladies and gentlemen, if you have a question, please press 01 on your telephone keypad and you'll enter a queue. We have a question from Peter Wallin from Handelsbanken. Please go ahead, sir.
Thank you. Good morning. I would like to start with a big question to, or big picture question to you, Johan, now being three months into your new job. Considering your background and your in-depth presentations and the slide kit it seemed as very much like more of the same. You're going to stick to most of the targets previously outlined. Three months now into the job, is there anything, considering your more consumer-tilted background, any kind of projects you've accelerated or anything else that you might have said that maybe we shouldn't focus so much on this? How will Avanza look differently one year from now compared to before you joined Avanza?
Thank you. Very good question. I think overall, if I compare the retail industry that I know quite a lot in depth, I think that the financial industry has quite a lot to learn from that. In the retail industry, you have to be even faster and even more quickly adopting to customer behaviors and formulate your customer offerings and your products in a way so that people like them every day and are willing to pay for them, and making them transparent and easy to love in a way that I think the financial industry haven't been that successful in up until now. It's also interesting how you view Avanza. I view Avanza as a very sharp consumer company. In that way, I've been spending 20 years with consumers, and I think that's the future for Avanza.
If I look on how I will contribute going forward, I think exactly that. We have focused a little bit more lately in our development pipeline on things that are really easy to understand, easy to love and transparent. I think over time that will deliver an even broader footprint when it comes to customers. I think we will expand our portfolio of products. I think we have a lot to learn from the retail business in being on your toes every day and making sure that you don't have happy customers because they're locked in, but because they choose you every day.
Okay. Sounds good. For some more, maybe not equally fun questions, but just rather technically on the cost progression, you're reiterating the guidance of growth, but since now you came in slightly below your previous guidance, the base is a bit lower. Should we have seen that previously, maybe you were aiming for the high end of the interval and now you have a bit less room, but you still think you can stick within the 15%-20%? Or is it in absolute terms that you're actually thinking you will have slightly lower cost by one year from now than what you thought three months ago?
I think, yes, I understand the question correctly. You're referring to our cost guidance for the next year?
Yes.
Yes. I think, just to have to step back, I think that we could run our extremely tight and well-operated business model as it is right now on a lower cost base. I think when we look out through the window, we see a couple of opportunities that exist here and now. We see a lot of regulatory changes that I think will go for example, more transparency that is extremely interesting for us to act upon. We see all of those changes as possibilities. I think that's the difference between us and some other players in the industry. Secondly, we see a lot of digitalization coming on. We see the entire fintech, but also digitalization on a broader note where young people have a different type of approach and lifestyle to digitalization as opposed to elderly age classes.
We see a massive opportunity to work with that. Thirdly, we see that there's a wind blowing among savers. They're just tired of giving too much money to the bank and pay too much in fees. When people start to understand that if you choose the Avanza pension model, you would have SEK 1 million more when you retire, not given that you have bad investments, but just in lower fees. That is extremely rewarding for consumers. If you put all of those three together, the digitalization, how savers are thinking, and also digitalization of savers of thinking and the regulatory changes, we have seen an opportunity to act. That's why we will invest more in more products and in user experience, and also in making sure that we are truly scalable.
We see that at the one-time effect in 2017, that we'll after that get back to our normal cost development. It's important to say that this is not additional funding that is needed for our existing business. This is additional funding because we see more opportunities out there right now, and we see a need to act in order to really maximize the value of Avanza for our shareholders.
Okay, thank you. Another thing that you touched briefly on it in your interim report on the pending potential extra payroll tax that Swedish financial services companies might get a year from now. Do you have an estimate for what the impact could be? You mentioned in the presentation that part of these investments are also going to be increasing the level of automation in many things that your investors will meet. Is it anything on the investments you're doing that actually could lead to you being able to lower some headcount after those investments are done?
Well, I wouldn't expect us to lower the headcount, if we can continue to grow in the same pace that we are doing right now with another 100,000 new customers per year for some years ahead without adding too many heads, I think that would be a tremendous story for us as well. Those efficiency works that we will do in the future is more not having to add even more personnel, at least in some places of the business, and mainly within the administration, of course.
Okay.
That's Yeah. If you look at numbers of that tax, I really do hope that tax will not come in place. Today the Alliansen told us that they will not support it, hopefully that part will not be. Of course, we will have some kind of tax on the financial industry. Let's see what that is when it comes to us.
Okay. Great. Thank you. I think that was it for me.
Okay. Thank you.
Thank you. We have a question from Monica Hanefelt from SEB. Please go ahead, madam.
Hi. Good morning. Short term, we could see in the quarter that the costs were better than what you had guided for. I was just wondering what costs Has not been realized in the quarter. This is my first question.
Well, it's different kind of things. We didn't really get the personnel in place that we would hope for. Some of it is IT costs that will spill over to the next year. It truly will be pushed forward. We still believe that we will have the same cost guidance for 2017, but we have pushed some of the costs forward instead.
Perfect. Coming back to Peter's question, when we talk about the bank tax, as the proposal is right now, do you have an estimate on the effects and if realized would this in some way alter your investment plan for 2017?
When it comes to estimate, I would say that the tax would be about SEK 35 million-SEK 40 million for 2018. Then, of course, it depends on how many new personnel we add to the crew. When it comes to how we will handle that tax and what that will have impact on our business we haven't really discussed that yet. We will have to come back on that question.
Yeah. Perfect. You've raised your ambitions in a number of targets. You've reiterated one saying that cost increase should not exceed income growth. What is the time perspective on this going forward?
These are long-term goals and should not seen from one year to another. We're increasing the cost for next year, and we'll see what happen about the revenues. This is weather for us. This is not something that we really could or can have an impact on. You probably will see a cost increase larger, or maybe you will find a cost increase larger than the revenues in 2017. After that, of course, our goal is to have a cost per savings capital not growing faster than the revenues per savings capital.
Okay. Thank you very much.
Thank you.
Thank you. We have a question from Nicolas McBeath from DNB. Please go ahead, sir.
Hello, congratulations to the good results and also interesting with the inspiring new growth targets. I had a question on the target. You raised the ambition to have 9% of the inflows into the savings market from previously 7%. My question is why you're kind of settling with 9%? I don't think you've had lower inflow or market share of the inflows than that since 2013. Wouldn't it be possible to aim even higher in that sense?
We try to set our targets from a very long-term perspective. Of course we want to deliver even more than that. I think when we have looked upon it, we want to have targets that we could live with under different weather conditions also in the long perspective. I think that's the background for why we've chosen that. If you look backwards on how we have delivered, we think that of course we'd like to grow as much as we can going forward, but we just want to outline that the targets should be long term and that all the different market conditions we should be able to maintain the same target.
Okay. Could you elaborate which of the two targets you raised now that you think will be more challenging, meeting the customer target level of the 1 million by 2020, or reaching more than 9% of the inflows into the Swedish savings market?
Very good question. I think they are somewhat interlinked and somewhat different. Of course, if we manage to get a very good customer inflow, that will help us to get the right inflow. I think in terms of the difficulties in terms of customers, it's to make sure that we have a tailored offering to the new target groups that we will go for. I think we managed to do that in 2016. It's important that when we have a broader footprint, that we will be able to maintain that preciseness in understanding the new customers and what they want. I think that is a challenge in that aspect.
When it comes to the inflow, I think it's both getting new attractive products so that new customers actually place their money with us, but it's also making sure that the existing customers really utilize all of the offerings that we have. I think we have a potential in activating the existing customers even more. I wouldn't say that one is more tricky than the other. I think they are both challenging, and I think they are challenging in different ways. That would be my answer to it.
Okay. I had a question on inflows into occupational pension savings. I think the inflows increased by relatively low, 13% in the quarter. Which is lower than the increase you've had, at least in other recent quarters. Is there any special reason why you see a slowdown in the growth in inflows in occupational pensions, and do you have any initiatives there to accelerate growth again in occupational pensions?
Well, we are not investing in further sales force or doing anything like that within the pension business. I would say that this depends, of course, from quarter to quarter, and we have some personal issues with leaving and coming in Malmö and Gothenburg that has probably given, in some extent, effect of the growth. We believe that we will still have great growth potentials within the occupational pension as well.
Okay. I think, Johan, you were quoted with some quite upbeat comments on new product launches from Avanza here in Swedish media in Q4, mentioning you expect some of the products currently under development to become among the most popular ones in a few years' time. Could you say something about the timing of these products that you are very excited about? When should we expect them to be launched in the market?
Well, I think, first of all, given my background in retail and also when I view Avanza as a really sharp consumer company, I think it's extremely natural that within five years some of the new launches will hit that list. The average in retail, I think that half of all of the products are dead within three years. I think we just have to adopt to a different type of speed in this industry. I think it's extremely natural that a lot of the things that we have in the pipeline will hit the top five list in a couple of years' time, and I think it was five years' time in that question. First of all, I think that's extremely natural. Secondly, we have a lot of things in our pipeline.
I think what we just went through when we discussed the decision support area, it's a little bit on how we work. There's not one individual launch, but rather I think we work through four gradual updates that we have done in the recent period. That is a little bit on how we work with it, and that is exactly what our customers like and appreciate, that we constantly, every second week, make updates to our offerings, and we went through in the presentation what we've done in the decision support area. Then, of course, we are constantly challenging a couple of big areas. When and if we have things ready in that, we will definitely go out with that. I think what is necessary for us to launch things in the market, it's two things.
First of all, that when we find a solution to a new product, it should really be a wow feeling among customers that this is a fantastic product. You take it to your heart, and you really adopt to it and like to have it. We don't want to launch a me-too product that has unclear benefits. I think the second prerequisite is a sort of aha feeling internally that we've done it in an Avanza way, going back to the true scalability, no other flexible cost or variable cost combined to it, and that we've done it in a really smart and cost-efficient way. When you combine the wow and the aha, that's the Avanza piece. We have a lot of things in the pipeline. Exactly when we will launch things I think we have to get back to when we bring it to the market.
Okay, thank you.
Johan-
Yeah. Someone had something to add there, or?
No, I just said, "Nice try.
Okay. Yeah. The final question, probably easier to answer. The tax rate for the full year in 2016, I think it was close to 14%. Could you remind us or perhaps update us on your expectation for the tax rate on a forward-looking basis?
The tax rate was a bit up. The major changes is when more customers are choosing the ISK account instead of the endowment insurance. More capital coming into the bank instead of the pension company, that was driving the tax % up.
It's still rather low. At least in my calculations, I think it was relatively flat to the previous year and actually down a bit compared to 2014. Do you think 14%, is that your expectation for the tax rate?
14%-15%, I would say it would.
Okay.
Yeah.
Okay. That's all my questions. Thank you.
Okay. Thank you.
Thank you. Thank you so much.
Thank you. I remind you that if you want to ask a question, you will have to press 01 on your telephone keypad. We have a question from Mats Egardef from Nordea. Please go ahead, sir.
Yes, good morning. I think all my questions actually have been answered. The main thing was on the bank tax and if you had any sort of actual actions planned to offset it, I think you answered that you will get back on that. I think I'm fine, thanks.
Okay. Thank you.
Thank you. There are no further questions at this time. Please go ahead, speakers.
Okay. I'd just like to thank everybody for a rewarding hour. Very interesting for us. We are very happy to convey a good 2016 and what we've been doing. Thanks also for all the interesting questions that were posed to us. Always, we're very happy to have a dialogue with all of your insightful questions and thoughts on how we could explain and elaborate on our future. I'd just like to reiterate a little bit on my personal notes that I think we have the vision and the will and the passion to bring out Avanza going forward and make Avanza even more Avanza. I think that we have a pole position in the race for the customer. I think we have a couple of tailwind things coming from digitalization, service, and regulation.
What we went through today I think is a good description on what we will do forward and our journey to make Avanza even more Avanza. With the high business activity that we had in 2016 and given our unique innovation culture we went through, that we delivered on our key targets, that we're very happy about that in 2016, that we are delivering on our long-term model with a true leading cost position as a basis for that. Finally, that the momentum going forward will continue given that we will focus on both attracting new customers, keep our existing customers happy, and focus on the true scalability that Avanza is all about. Given that, I'd just like to thank everybody for participating and wish you a good day.