Million kroner. Higher interest bearing balance combined with several actions to increase yield on both front and back book helped grow the total income line with a strong 17% in the quarter. We continued to execute on structural cost out initiatives that will bring our cost base down over time. In addition to further right sizing actions, bringing the FTE level down by around 40% year-on-year, we made decisions to exit POS Finance as it is no longer meeting the expected returns. As well as to write- down a significant part of our past IT investments as we are making good progress on our IT transformation roadmap. You would have seen that we announced an IT write- down of NOK 91 million in mid-January.
The write- down combined with a few additional one-offs related to the restructuring influenced the reported OpEx line as well as the profit after tax for the quarter as can be seen on this page. However, based on the great progress being made now across the strategic initiatives, we are confident that we will be able to deliver a strong 2023, targeting to grow our loan book by around 20% and bringing the cost income ratio down to around 30%, both ahead of our communicated 2024 ambitions. Now, t urning to page four of the presentation. This is a page that we have used before, you've seen before, but I believe that it makes sense to quickly recap on our strategy and ambitions.
This is a three-year turnaround strategy, and w e continue to follow the plan we laid out a year ago with the aim to reposition the bank for growth. As already mentioned, we are well underway with the execution. We have not revised our 2024 ambitions yet, but as I alluded to on the previous page, we are tracking ahead of plan as both balance growth as well as on cost efficiency. Turning now to the next page, and I'm now on page five of the presentation. At the beginning of 2022, we also communicated a set of initiatives that we would focus on throughout the year. I'm happy to report that we have made significant progress and delivered on all of them.
Following the sale of most of the bank's NPLs, we now have a clean balance sheet with an NPL ratio below 3%. The teams have delivered on a wide range of actions, tuning our products and processes, and we have managed to restart the growth engine of the bank, resulting in a loan book growth of around 30% in the second half of the year. As a matter of fact, January sale this year was four times higher than January sales last year. On the cost side, as already mentioned, we delivered multiple restructuring actions resulting in an FTE reduction by around 40% year- on- year, and initiated several further initiatives, including outsourcing of non-core activities and moving to smaller offices.
As we look ahead, we will have full focus on further simplification of our IT platform, and the transfer to a more future-proof setup is now in execution. Ultimately, we target to bring the cost of IT down by around 40% over time. I would also like to mention that based on the good progress made, we have decided to rebrand the bank and will be trading under a new name from May this year. We will talk more about our targets for 2023 in a little later in the presentation, but as you can clearly see from the graph to the right, we believe that we have turned the corner on both growth and efficiency. Turning now to page six, and before handing it over to Eirik, let me just quickly say a couple of things around our view on the market dynamics.
The Nordic markets have proven to be rather stable and resilient during times of global macroeconomic uncertainty. Despite the current challenges, we continue to see strong demand from creditworthy customers and have yet to see any issues with credit quality. We believe, and have also experienced, that the higher general interest rate levels will open up the possibility to increase interest spreads over time. All in all, based on the macroeconomic indicators on this page, we remain positive on the outlook for our segment. And with that, I will now hand it over to Eirik.
Thank you, Øyvind. We're now proceeding to slide eight. As you have heard earlier in this period presentation, we're definitely happy to confirm that our growth momentum has continued in Q4, where we again increased our loan balance by 14% or close to NOK 1.2 billion in nominal terms. We foresee to continue our growth in 2023, although at a somewhat lower pace, aiming at striking a balance between growth and solidity. And we foresee to end the year with a loan balance approaching NOK 12 billion. The growth has taken place in all three of our markets, with Finland and Sweden now outpacing Norway. We are attributing this to both a benign market development and also to enhanced sales processes that improve conversions, as you can see described on the slide.
And not the least, a larger sales effort, including a considerable investment up front in loan losses, which we will touch on later from our side. We now turn to slide nine. On the yield picture, we see that we are largely maintaining the yield on our lending products. There is a slight decrease in the loan's yield as the effects of the competitive situation are being felt, and new loans offered at a lower rate are weighing in. That being said, we foresee to increase the overall yield during the year to reflect the development in the market conditions. The same will happen for credit cards, as we also expect increasing yields due to higher interest rates and a shift towards a more revolving type cardholder base, where the yield will, of course, be higher than for the non-revolvers that do not pay any interest.
The deposit accounts are expected to follow market conditions. The average yield for the three countries in which we are present was 1.7% in Q4, and we expect this rate to increase to more than 3% during the year. It should also be noted that there is a lag in the timing of interest rate increases for loans versus deposits, as there is a mandatory notice period for loans in Norway and Finland of six weeks and two months, respectively. But, o ver time, these differences will catch up. We now turn to slide 10. Then, as a result of the loan growth, and yield pictures, we see that the total income has improved by 17% over the last quarter. In addition, we have also benefited from a boost driven by net commissions and fees, as well as a gain in financial instruments.
Looking forward towards the end of 2023, we see that we will be having a total income potentially approaching NOK 217 million, driven both by the expected loan balance increase of around 20% for the year as well as for the higher yields. Turning to slide 11. As we previously have communicated, we have undertaken a considerable write-down of capitalized IT investments in the quarter. This came as a result of having undertaken a review of our IT strategy and plans going forward, which are now taking effect. We have recorded around NOK 2 million of cost for a capitalized office rental lease contract that we write- down as we will be moving to more efficient and less costly premises during 2023.
In addition, we do have some other one-offs in relation to this turnaround that include non-recurring administrative costs as well as costs related to personnel restructuring. In all, the operating expenses came in at around NOK 202 million, of which 105 were one related to the one-off write-offs. Looking forward, we see that at the end of the quarter, we expect to have end of the year operating expense of around NOK 80 million. The reduction in OpEx is derived from cost out in relation to personnel and the other changes that we're doing. We also expect that the cost of IT ownership should decrease by around 40% over the year due to further efficiencies. Given the considerable one-off secured, the cost income ratio of 92% for the quarter is not really meaningful.
However, when adjusting the ratio for one-offs, we see that the underlying rate of 45%, down from 50% last quarter, and we foresee that the last quarter of the year, 2023 should arrive at less than 30%. Now on to slide 12. As we have discussed in the past, we are using the accounting standard IFRS 9 to determine the valuation of our financial assets and hence also determine our loan losses. This standard is requiring us to record upfront 12 months of expected loan losses, and with our considerable growth rates, we then have to absorb a substantial cost. In addition, we have recorded NOK 40 million of loan losses related to older underperforming cases that we now have decided to also write- off.
In all, our loan loss ratio for Q4 came in at 5.4% when disregarding these latter loan loss cases. Furthermore, if we disregard the Stage one allowance of NOK 32 million for the quarter, which may be considered representative for our provisioning related to growth, we can see that the underlying loan loss ratio for the quarter is actually 4.0%, which we consider to be a normal level for our business and the segments in which we are present. Looking forward, when our loan balance has increased, growth is leveling somewhat off, and new loans make up a relatively smaller part of our loan book, we see that the loan loss ratio will be around 4.5%, and the losses in nominal terms for the quarter will be at roughly today's level.
But then, we will also have a larger loan balance on which we'll earn a higher income. Finally, we do consider our loan balance to be sound. We sell most of our delinquent loans after 90 days on forward flow contracts so that less than 3% of the loan balance is non-performing, and our Stage three coverage ratio is now 62%. Hence, the forthcoming impact of the so-called backstop legislation will not materially affect our capital situation. We now move on to slide 13. If we sum up the previous slides, and particularly given, particularly given the impact of the write-downs, we see that the quarter obviously ended deep in the reds with a loss of NOK 82 million after tax. This was an exceptional quarter, and we foresee going forward to again be in the blacks.
By the end of this year, we expect to have a quarterly income exceeding NOK 40 million. The graph on the right depicts this development, where the key contributors obviously are improvements in total income and, needless to say, operating expenses. We now move to slide 14. Our capital situation remains commensurate to our business. As our loan balance growth in the quarter surpassed the capital generating rate, our capital ratio then decreased. Please also note that the impact in the quarter of immaterial assets did not impact our capital ratio, as these had already been deducted from the CET1 capital. Going forward, we will strike a balance among growth, solidity and capital structure so as to optimize these. With these words, I now leave the floor to Øyvind.
Okay, thank you, Eirik. I'm now turning to page 16 of the presentation. Before moving on to Q&As, let me try to summarize the key takeaways of our presentation this morning. As we laid out our repositioning strategy a year ago, we addressed two main drivers that we had to focus on turning around: growth and cost. One year into the execution of the three-year plan, we are seeing that both KPIs are now definitely moving in the right direction, with significant growth of 14% in the quarter and cost coming down, as this graph clearly illustrates. Additionally, we have significantly reduced the risk on the balance sheet over the period. In sum, we are on track with building scale and efficiency, we are therefore now confident with communicating our key targets for 2023 as follows.
Loan balance growth of 20%, cost-income ratio around 30%, and return on target equity of around 10%. Thanks for listening. We will now open up for questions. As I said, if you want to send us a question, you can send that on ir@komplettbank.no, or you can use the chat function in Teams, raise your hand, and we will open up so you can pose your question. If you would like to ask your question in Norwegian, that's obviously also perfectly okay.
Okay, we received a couple of questions in the chat. Let's start with one of them. It's in Norwegian. I will say it in Norwegian and Eirik and Øyvind will answer in English, probably. {foreign language} What are forventet besparelse for å droppe Komplett navnet royalty, og er forventet kostnad for navnebytte i 2023?
Yeah, I will try and answer that. The question was what we expect to save by exiting the brand royalty agreement with Komplett Group and rebranding. For this year, we expect to actually see a saving in total. So what we pay in royalty minus what the rebranding would cost. Obviously, going forward, we will not be paying the royalty. This is a double-digit NOK million amount that we have been paying over the past few years, so that would be a saving. Having said that, I would also like to, I think, just say that we have been very happy, the bank's been very happy with the cooperation on brand and on the POS product with Komplett Group.
But things change, things evolve. POS product is not longer a strategic product for the bank. As I said, we are moving fast ahead on our strategic repositioning and that gives room and naturally prompts a new name for the new bank, so to speak.
One more question. hva er forventet besparelse på IT i NOK for 2023? 40% fra 2022.
Okay. Let me just try and for the English speakers repeat that. The question was what is the expected savings from on the IT cost side in 2023. 2023 will be a bit of a transition year as well for IT. We have terminated a few contracts. Some of you might know that we have been running on two core banking systems. We're going from two to one. We're exiting that agreement a little later in the year and a few other things that comes out during the year as well. So, you'd see the cost of IT come down quite a bit.
The target, however, of taking the overall sort of cost of ownership of IT down by 40% is a target that we have for the period after the transition to out of the old and into the new, so to speak, have been completed. That's more a target for 2024 and beyond.
And here's a question for Eirik. In rapporten står det negativ avkastning per aksje på NOK 0.07. Den skal vel være pluss?
Thank you for the question. In the report it states that there is a negative return of NOK 0.07 per share. It should be positive. Both yes and no. It's correctly that the profit after tax for the year was positive by NOK 0.9 million. However, this profit also includes the AT1 interest, which needs to be paid out to the AT1 share bondholders. If you deduct this interest payment, the return to the shareholders actually become negative as it's stated there.
Question four. Det har vært to år med rydding i balansen som har ødelagt resultatene. Kan vi forvente 0 NOK ekstraordinære kostnader i 2023? Er ryddejobben ferdig? For eksempel, har dere satt av kostnader for alle oppsigelsene i 2022?
That's a good question. Thank you. It's related to the one- off cost that we have taken over the last couple of years related to the restructuring. Maybe starting with the last part of that question before the or first the restructuring cost for all the organizational restructuring in 2022 has been charged to the 2022 P&L. We are not expecting any further large cleanups of balance sheet items in 2023 and beyond. As you clearly stated, we have, we focused first on cleaning up the NPLs, which we did in 2 rounds, the bigger one in Q4 2021, as you might remember, another one in May last year. That has brought our NPL ratio down to under 3%.
There's not much more sort of NPLs to be taken off our balance sheet. In terms of the restructuring, as I said, we've taken the cost of that, the ballpark of actually all of it in of the actions we executed in 2022 into 2022 financials. Going forward, there is, we expect no further surprises on the cleanup. We continue to improve processes, improve systems, we don't foresee any larger one-off costs related to that going forward.
The last question from Hatletveit is litt overrasket over enda flere ekstra avskrivninger på låneboken, NOK 14 million etter alle oppryddingene tidligere, spesielt i slutten av 2021. Har dere tilstrekkelige avsetninger nå?
Yes. This is a question that one is surprised to see another NOK 14 million in additional write-offs after the cleanup you did in 2021, and if we have now made sufficient provisions? Yes, we have gone thoroughly through our loan book, and we have wanted to be on the cautious side and hence done also additional write-downs. As far as we're concerned, we don't, we're not aware of any other further surprises, so to say. Basically we expect our loan book to be clean and that we have sufficient provisioning in place.
Jan-Erik Gjerland has raised his hand and his mic is now open. You can ask your question, Jan-Erik.
Thank you. Holtedahl had some good questions, so I have just one left and that is the yield improvement of 100 basis points. How should we read that? Is that actually something you have put into your new loans and that you have sort of increased all through not only Norway and Finland, but also Sweden? I think you have a different kind of setup in Sweden. So, could you shed some more light into how we should read the 100 basis points increase in yield versus your deposit costs? Is it so that this is 100 basis points above the deposit cost or how should we really interpret the levels? Thank you.
These levels are reflecting the market rate development. But thank you for the question. These levels are reflecting the market rate development. And as we expect that the underlying rates will increase further and as you know, there is a lag, particularly in Finland and Norway related to loans, we will be increase, we foresee that we will be increasing our loan book throughout the year just as a reflection of this market rate increase. So it is in a way moving in parallel with the deposit rate increase. So in a way we're covering our increased funding costs.
Maybe just add to that, I mean, this is not just something we plan to do. This is something we have actually done quite a number of times already in the, particularly in the third and fourth quarter of last year and w e planned several rate adjustments both on back book and front book as we go forward. So we're quite confident that we will be able to actually take interest rate up on our back book also when market rates increase in general in the market.
Okay, it means that the NIM should probably not move that fast upwards. It's more about your lending growth being good and then have a supporting NIM to that. Is that what we should expect?
The NIM is what we're trying to protect. I think in the short term, you will obviously see that the interest expense go up a little faster than the interest income, due to that lag that Eirik just described. We have to give notice to customers in Finland, actually two months notice, when we adjust rates. But over time, we are expecting that we could actually widen the spread also on NIM when interest rates in general come up in the market and stabilize on a higher level.
Perfect. On the lending side, you said that January was four times better than something, I couldn't get a hold on. You see the growth in Norway was 9% Q on Q in Norway, 18% and 20% in Finland and Sweden. Is the January and February outlook, better in Finland and Sweden than in Norway? Or how should we look at your sort of future outlook for the NOK 12 billion headline, which you show us, by the end of the year?
That is a good comment and a question. I mean, what I said, was that our January sales levels this year was four times better than January sales levels one year ago.
Okay.
We generated four times as much volume in January this year than last year, just to kind of call it a proof that things have improved significantly over the year. Now, as we look forward towards sort of the NOK 12 billion target this year, you will see us focus more on Finland. The yields and spreads are better. We're funding that obviously in euros from Germany. That is still a better deal than the funding in Norway and Sweden. The yields or the interest rate level is also a little higher in Finland. So, you will see us grow more in Finland this year than what you would see for Norway and Sweden.
And just finally then, the loan loss levels of four and a half, is that what we should sort of pick into our models rather than the three to three and a half, which I think consensus on us have today?
That is a more accurate number we believe when things normalize 3.3 to 3, no sorry, 4.3 to 4.5-ish. And again, what we look at, what we think is potentially more important than just that number, is to see that in relation to the NIM as we just discussed. We're trying to balance NIM and the loan loss number so that we come to you know, a good return, risk-adjusted return, if you like, over time. Based on where we see the interest rates go, we also believe that a 4.3, 4.5 is an okay level to be at in the midterm.
Perfect. Thanks a lot.
Christian Falnes has raised his hands. He can now ask his question. Christian. Please unmute your microphone first. Christian Falnes, can you hear us? No. Okay. There is one question in the chat. Will you still offer a credit card with a reward program after the rebranding?
Thanks for the question. Yes, we will.
No more questions in the chat. Neither on the email.
I will give it a few more seconds if anyone wants to send us a question or raise your hand. If there are no more questions, I'll take it. Again, thanks for listening in this morning. I hope this was helpful. We will be seeing you again in a quarter's time. If you have any questions in the meantime, feel free to send us your questions, comments on ir@komplettbank.no, and we will do our best to come back to you as fast as possible. Thank you, and have a good day.