Good morning, and welcome to the presentation of Nordnet's third quarter of twenty twenty-four. My name is Marcus Lindberg, and I'm the Head of Investor Relations at Nordnet. With me today, we have our CEO, Lars-Åke Norling, and our CFO, Lennart Krän. Lars-Åke and Lennart, we'll start off by presenting the results, and then we'll have a Q&A session. During the presentation, all participants will be on mute. And when we come to the Q&A session, you have two alternatives to ask questions. So you can either click the Raise Hand button, I'll then unmute you and call your name, or you can write your question using the Q&A button. The presentation itself is available on our corporate website, nordnetab.com. Okay, let's start the presentation. Lars-Åke, please go ahead.
Thank you, Marcus. Yeah, some highlights from the quarter is a strong financial quarter with continued growth in the core brokerage and fund business. Highest customer growth also in seven years, and we passed the milestone two million customers in August, so we've increased the customer base from one million customers to two million customers in about four years. We also see very healthy trading activity and strong brokerage margin, and margin is strong with also the high share of cross-border trading, but also a little bit high share of retail trading versus private banking. Very good progress on our fund-focused strategy, with Nordnet Funds growing 65% in one year, but overall, fund capital is growing 42%, which is also very good.
Stable outlook for NII in 2024 at SEK 2.6 billion, same as we had in quarter two and same as last year. Good cost control and cost growth is expected to trend in line with guidance for the full year, excluding the extra marketing cost. We also initiated a share buyback program. I think Lennart's gonna talk more about that, but we're gonna buy back SEK 500 million or up to SEK 500 million until March 2025. And a lot of product launches, enhancing app and share functionality, especially, we launched a very asked-for function, and that's analyst ratings and target price. I'll come back to that. You can go to next. Some financial highlights: we see an increase in customer growth.
The customer base now growing 12%. Also, very good growth in the savings capital, up 26%, both from underlying savings capital growth, but also strong net savings, and we actually, last week, passed the milestone of SEK 1,000 billion in savings capital on the platform. Number of trades was up 13% year on year from stronger markets and stronger market sentiments. Revenues up 6%, where we see a strong and good growth in our fund business and our trading business, but a slight decline in the net interest income due to lower interest rates. Good cost control, like I said. The underlying cost growth is 6%, excluding extra marketing costs, and we expect to meet the full year guidance, like I said.
Also good operating leverage still and profit growing at 6% year on year. We go to next. Also, clear strong rebound and step-up in customer growth and net savings versus last year. Especially strong quarter two here, with 75,000 new customers, also supported by the campaign we ran in September, where to celebrate 2 million customers, each new customer got SEK 200 in Nordnet One Balanced fund. So we had almost 40,000 new customers in September in itself. But also very strong net savings, 16 billion for the quarter, but also 54 billion in 2024, that's more than double that we saw last year.
And we will continue to be supported by our geographical diversification, de-risk both the business model, but also enables growth. And we see strong growth in both savings capital and customers now in all countries. But again, especially strong growth in Denmark, where we passed now five hundred thousand customers. And also we passed a milestone in Finland with six hundred thousand customers. Next. A little bit on the revenue stream, starting with the trading. A number of trading customers in the quarter is about the same as last quarter. Also, trades for trading customers is about the same, and we see, I mean, at least the Nordic markets are a little bit in a holding pattern since May.
So it's probably gonna be some kind of breakout from here, but it's a little bit limited trading in the period, but still a step up versus last year. But still a very high cross-border trading due to the country mix, where we have more customers than outside of Sweden, where... and they trade more cross-border. But also, of course, that we have strong US markets that also attracts cross-border trading. Go to next. So you see, if you look at trading overall per customer in the base, the red line that to the left is stabilized now in the last two years.
It's still a little bit lower level than we saw pre-COVID, but still, we almost have double amount of trades per day in absolute terms, due to the double the customer base from one million to two million during the period. We also see a considerably higher income per trade, with the 44% up since pre-COVID, and that's mainly due to more high share of cross-border trading from the country mix that we have. Also, again, very proud of the development in the fund business. Fund capital growing twice the savings capital, and 42% up in fund capital in one year.
Also very good performance in our own Nordnet-branded fund family, where we see one quarter of the fund capital is in Nordnet-branded funds, and half of the net buy is also going into Nordnet-branded funds, and that's a family of index funds. Half our customer base owns funds, and activity is pretty high also, so 500,000 customers did the fund buy or sell during the quarter. We see continued a little bit shift from active to passive, even though that slowed down. We see now when the customers buy index, they mainly buy the Nordnet index funds, where we have a higher margin as well. Next. A little bit on net interest income then, starting with deposits.
And deposits versus savings capital is still at a fairly low level of 7% versus the historic trend of 12%-15%. We saw a slight increase of deposits in the quarter from strong net savings and also dividends. But we continue to see very high net buy into both funds and equity or shares, which is, of course, good, very good for our business long term. Looking at the liquidity portfolio snapshot, we see that's gonna land around SEK 1.65 billion in 2024, assuming the volumes we see then in quarter three, end of quarter three, and also that we get the unsecured loan money into liquidity portfolio now in October. And then currency allocation, credit spreads, of course, market consensus estimates as per below.
Two comments, I mean, of course, the sensitivity here is deposits. We are on a low level, so if growing customer base and growing net savings, we likely would have an upside here over time. Then is, of course, the interest rate passed on to the right, which is lower than we saw in quarter two. It doesn't impact the quarter that much, but of course, it has a bigger impact in 2025. I can go to next. Loan portfolio snapshot, SEK 1.55 billion in 2024, assuming that the third quarter volumes, but excluding that unsecured debt, then moved to liquidity portfolio. And with the IBOR consensus estimates as per previous page, and a pass-through of 100% on mortgage, but 50% on margin lending.
Here also, we foresee a continuous growth in our lending portfolio, not least in margin lending, which is the product that's been growing, and that's the most profitable lending product for us. It's also lending product that supports our core business, and it's also less rate sensitive, but only estimating than 50% pass-through. So far this year, the pass-through has been even lower than that. I can go to next. On deposit side, I mean, we estimate then SEK 600 million cost for that, assuming the volume we saw in September, and interest rates as of October 9th, with 100% pass-through estimated on September rate cuts.
Sensitivity here is, of course, if the growth of deposits into the savings accounts, but we see that growth has slowed down, and I think in an environment with lower interest rates, more money will move to transaction accounts and be used for transactions over time. But we also know when we get the new money into the savings account, the majority of that money coming from external deposits, that we also then will have yield on our liquidity portfolio, so all in all, resilient revenues then, supported by diversified revenue streams. We have good growth in all the revenue streams, both NII, the fund business, and trading.
But again, especially happy with the very strong growth we see in the fund business from the focus we have there, but also a good pickup in trading revenues from more positive market sentiment from the lower rates and lower inflation. Looking at the margins for trading is slightly up there, down to the right, due to higher share cross-border trading, and margin for fund business is stabilizing now around 25 basis points, from a little bit slowdown from active to passive move, but also that when a customer buy passive, they buy in order passive, have a higher margin. So looking at the numbers in total, then, I mean, it's the same story.
It's very good revenue growth over time, almost 30% growth per year since 2019. But at the same time, a very scalable business with good cost control, where costs has only been growing 5% per year in the period. So almost all the top-line growth is ending up on the bottom line, so true position of profitable growth. Next. Also shipped a lot of nice, exciting features during the quarter. This is just a snapshot. We have released a number of new features in Shareville. You know, we integrated the Shareville fully into our app and web before summer, and now we have the team that can ship continuously new, exciting stuff.
We see very good momentum in both the sign-up to Shareville and also post in the Shareville forums. We've also been very active with the app, with overall 25 new versions of the app in the quarter. But we're especially proud of the launch that we did yesterday, which then have analyst data and also a target price update. So, Lennart.
Thank you very much. We can go to the next slide. We're pleased with the continuously being able to say that this is a very strong capital situation, and also the liquidity situation is very solid. All this, of course, creates a lot of flexibility. We have launched the buyback program, share buyback program, SEK 500 million in late September, which actually withdraw SEK 500 million from their own funds, and still a very good capital position. This flexibility will give us room to continue the buybacks even after this one has exceeded, that will be done in twenty-first of March, twenty twenty-five. We look forward with the continuous even then, good capital situation.
I don't think it's very much more to comment on here. It's, as I said, very solid, and we can continue, Lars-Åke.
Yeah, and just a short recap on the strategic ambitions, where we have four main focus areas, starting, of course, with having the most satisfied customers by building a one-stop shop, and for savings and investments, with an outstanding customer experience, but also, on the employee side, we can never reach the to have happy customers on this, a very passionate and talented staff, where we have engagement going up, and also that we can attract key talent, then the sustainable business. We are in a trust business. We need to earn that trust every day, and we need to especially manage our risk in a good way and secure that we're a trusted and liked brand.
And then it's profitable growth, then to capture this fantastic growth potential we have in the Nordics, to take market share in a growing savings market, and also secure that we continuously then have a stable or a good scalability and good cost control also going forward. Yeah, also very good growth over time in customers and savings capital. The customers really like our platform, but we also have critical mass in all countries that drive word-of-mouth based growth. We'll go to next. We're taking market share in a growing savings market, and this is why we have had such a good top-line growth the last years, but also hopefully we'll have good growth in the coming years as well. We have 7% of the Nordic population on our platform.
We have 6% of the addressable savings capital end of last year, which is big. It's SEK 14 trillion . But we also know that the savings market, the address market, is growing from underlying growth in the capital, but also that we launched now the Livrente product. In 2026, we're likely gonna have around SEK 20 trillion addressable market. Historically, we're also taking market share than the growing market, so hopefully we can do that also going forward. Then you see to the right, we have highest market share in equity trading, lower in funds and pension, and that's why we also put a lot of effort in the fund and pension areas with good success. Also very much a focus, a lot of focus on cost discipline.
And we have limited cost growth, 5% per year since 2019, in spite of doubling the customer base from one million to two million customers during the same period. So we have good cost control and also very scalable business model as such. The drivers we talked about, that we have a really modern, scalable, cloud-based platform. We work a lot with process automation and simplification, which is win-win. Works better for customer, we scale better. Also very efficient customer growth. It's mainly word-of-mouth based and PR-based, so low acquisition cost, and also that we very much work with the third-party vendors to manage cost and cost growth. And looking at the financial targets and the actuals here, we're basically in line with all the targets.
We can move to the next. The key priorities for 2024, then, the last quarter now is number one, the launch of the Danish Livrente pension product, and we launched this product now to a few customers, and we're planning to do a full launch in the coming weeks. So that's very exciting because that's a SEK 2 trillion market over time, and we have 500,000 customers in Denmark that we can sell this product to, so it's very exciting. We also have a very strong offering in the high-end segment, and we continuously develop that offering, both then with the analyst ratings and target price we just launched.
We're also gonna have algorithmic trading launched very soon, so VWAP, TWAP, dark pools, dark/ lit, et cetera, but also that we're gonna launch currency account on the ISK and KF. What we talked about also, that we're rebuilding the portal we have for our partners, so local wealth managers that use our platform for their customers, and so that's gonna be a clear step up and a way to also grow the partner business going forward, and we also, as you know, work with strengthening our brand position with spending a little bit more on marketing, and overall to build a higher brand awareness for Nordnet across the Nordics, and here we're working now with a fully new brand concept that's gonna be rolled out from beginning of next year.
But of course, continuous focus on cost control, scalability, and automation. So I think with that, Marcus, I hand over to you.
Great. Yes, it's time for the Q&A session. So as a reminder, if you wanna ask a question, just click the Raise Hand button in Zoom. I'll call your name and unmute you, or you can submit a question in writing if you want. So the first question comes from Emil Jonsson at DNB. Please go ahead.
... Good morning. Thank you.
Good morning.
I just wanna start off by asking, so the fund margin, I think it was at the highest level in about four quarters. Is this due to some sort of mix shift that you should expect to persist into the future? Or should you sort of expect the, you know, ongoing shift into index funds to keep driving the fund margin further downward in the near future?
I mean, I think we see that the fund margin has stabilized around thirty-five basis points. It's been there now for close to two years. And between the quarters, it can be a little bit wild, I mean, how we do accruals and things like that, so it can shift a little bit between the quarters. But we see that we can maintain a stable margin around thirty-five basis points. I think the shift to passive has slowed down a bit, but also, you know, when customers buy passive, they normally buy our passive funds, which is very well priced to the customer, but it's higher margin for us. So that means that we're growing volumes, will also trickle down to revenue.
All right, thanks. A question on your customer growth. Noticed you had a quite large spike in September.
Yeah.
Was that just due to the you know the Nordnet One campaign you did in September? And have there been any significant inflows from those customers, or did they just you know sort of-
Yeah
... take their SEK 200 prices?
Yeah, and leave the platform. Now, I mean, about half is from that campaign, and we, of course, try monitoring this cohort very, very carefully, because it's a bit interesting to see how they behave, and overall, I can say a little bit younger, but not that much. A little bit less deposits than a normal customer base do, as a new customer, but not that much either, so we are actually a little bit positively surprised with the campaign, because, of course, the concern is what you mentioned, they just take the SEK 200 and leave, but we haven't seen that trend. A little bit lower activity level of deposits, but not, but still good.
All right. Based on what you've learned from that kind of marketing push, do you see any reason to run similar campaigns in the other Nordic countries?
Yeah, so we... That the two million customer campaign we ran in all countries, where we had the, I think, highest effect in Sweden and in Finland, but also good in Norway and in Denmark. But it's clearly, I mean, the campaign thinking, you can think about if you want to have off and on some campaigns, because of course, that makes a buzz in the market. And if you see that the customer base that you get in is also profitable, and then it can be an option. But it might, it doesn't need to be this kind of campaign. It can be other campaigns.
All right. Next year, I see credit markets are pricing in IBOR rates, evening out at just under 2%.
Yeah.
Consensus right now seems to be expecting about a 17% decline in your NII. If you were to do the same sort of NII snapshot exercise for next year, do you see any reason that the decline in NII would be more than those 17%, or is there any drivers that people might be missing?
Now, but if you keep the volume flat as per now, so the same deposit volume, same lending volume, same savings account volume, then we'll go to 1.9 billion, so from SEK 2.6 billion- SEK 1.9 billion. But consensus is at SEK 2.2 billion. And we know we're growing the customer base. We have very healthy net savings, so we will see a higher lending growth, for sure, and likely also a higher deposit base as well, going into next year. And consensus is pricing in, I think, a SEK 10 billion increase in deposits until next year. So clearly, there's some margin contraction in there.
All right. That's helpful. Thanks, and just one final question. Your largest peer recently announced their ambition to go beyond Sweden.
Yeah.
What can you share about the conditions for growing in the other Nordic countries from a small size?
Yeah, I mean, I think the learnings, if you start a greenfield, I mean, it takes time to build your brand position and get, especially critical mass in customers to drive profitable customer growth. It took us, like, fifteen years outside of Sweden when we did that. You might be able to do a little bit faster today, but still, it's gonna be a long period before you reach really critical mass. On the other hand, I think the penetration outside of Sweden is a bit lower. I mean, Sweden is around 25% penetration on digital platforms. Outside of Sweden is around 10%.
All right, that's it for me. Thank you very much.
Thanks.
... Thank you, Emil. The next question comes from Patrik Brattelius at ABG. Please go ahead.
Perfect. Thank you. Staying on the topic of competition, you highlight the increased competition in Denmark. Could you please elaborate a little bit on that? And also, how do you view M&A as a growth strategy to strengthen your position further in the Nordic countries?
Yeah, I mean, competition is always coming and going, and we are in a competitive market. As you know, Nordics are interesting because it's high digital literacy, but also high savings rate, a lot of savings capital. I think a little bit, what we've just announced now, I mean, a little bit more and new players in than Sweden and Denmark. And in Denmark specifically, I mean, it's two new players, and Tobi is a smaller platform, and also Pluto is another platform. But it's nothing strange. We've seen the same in Sweden off and on. But for us, of course, when it comes to competition overall, I mean, we think it's good. We're a challenger.
We always have competition, and we can never lean back 'cause we are always on our toes. And what we really focus on is to be this one-stop shop for savings investment. You should be able to find everything that you need in that space, and that's why pension is also very important for us. But also coupled with an outstanding customer experience, and overall, of course, a low price. But we don't see that we need to be cheapest on every single price point. I think that's proven in a number of cases.
Yeah, but then on M&A as a go-
Yeah
... growth.
Yeah, sorry, I forgot that. Yeah, so I mean, if, definitely if something comes up in the Nordics, we will look at it. So especially if it's a smaller place, like, we can look at it, but it boils down to how much we need to pay them for capital customers versus organic growth. But of course, if something comes up, we can look at it. Yes.
Okay, thank you. And then on to NII, where you talked a little bit about the drivers and increasing deposits. But since the start of 2022, we have seen deposits fallen while savings capital is up almost 30% since. So why do you believe that growth in savings capital from here will drive deposit growth? Isn't it a risk that it will follow the same trend as we have seen for the past two years?
Yeah, but it stabilized considerably the last quarters, and it's actually been up a little bit two quarters now. And I think in this equation of net savings coming onto the platforms and, of course, dividends, which is strong, at least H1. So with the growing customer base and with more net savings, we foresee also higher deposit base, and it's been extremely high net buy was into the market since it's been a strong market, especially in quarter four last year and first half. So we just know that we are on low levels now. Exactly how that will play out, and when, and that remains to be seen, but we see a likely upside on deposits, so that's very clear.
Same as you see, an upside on the lending, of course, and not least margin lending, which is the most profitable product.
Yeah, because it seems like the deposit relative to savings capital continues down, and-
Yeah, but it's also-
Do you-
... that, I mean, we've had, I mean, the markets are up considerably in one year, so that's of course part of that equation. As we also know, if we have a little bit market shakeup, deposits will increase very rapidly, so that we need to be prepared for when it comes to leverage ratio. So a little bit more volatile market will also likely increase the deposits.
Okay, thank you. So in order to not take all of the time on the Q&A-
Mm
... I end with a question on one of the impacts from the divestment of the consumer loan book. What should we be aware of for the fourth quarter here?
Yeah, I think it's a note there, Lennart, in note. Is it note eleven?
Yeah.
Where it's all lined up, laid out, but it's the one-time effect is around -SEK 40 million. Little bit up from the press release, was - 30, was some post-closing adjustments, but overall, it's the same story as we told in the press release. But you have all the details in Note 11.
Perfect. I missed note 11.
Yeah.
Great. Thank you.
Most people do.
Very interesting note.
Thank you.
Okay. Thank you, Patrik. The next question comes from Ermin Keric at Carnegie. Please go ahead.
Good morning. Thanks for taking the questions. Maybe if we start on NII, again.
Yeah.
In 2025, the SEK 1.9 billion you mentioned, what assumptions have you made there? Is that still then 50% pass-through and 100% pass-through on the deposits, and-
Yeah
... that's included?
Yeah, it does the same as-
Assumptions.
Exactly. It's the same assumptions as we have for this year's outlook, so to say, but with the volumes that we see now then.
Okay, great. Thanks. And then I think we already touched a little bit, but when it comes to your expectations, that trading per trading customers should break out on the upside, you've been saying that for a while, but we've seen it being stable.
Mm-hmm.
So what gives you confidence that it will break up and kind of... Is it just volatility that's needed, or-
Yeah, I think it's volatility. I mean, if you look at the Nordics markets, especially, they've been in some kind of a holding pattern since May. It's up a little bit, down a little bit, but it's no major movements. We see a little bit more perhaps the last days now reporting. But still a rather quiet market, and it's probably gonna be a breakout from this holding pattern, either on the downside or the upside. But that will, of course, generate more trading. U.S. markets have been a little bit stronger, as you know.
Okay, and then, just this new feature with estimates from FactSet.
Yeah.
Is that gonna be any big cost driver to acquire that data?
No, no big cost driver. It's... That's just marginal.
Okay. And then final question: you've had the target to have the highest customer satisfaction across your four markets.
Yeah.
Do you expect to win in Sweden this year, or?
Uh
By when are you gonna be number one in Sweden?
Yeah, I think we are very clear number one position outside of Sweden. If you look in Sweden, we're closing the gap to Avanza, and the last... We do our own measurement, where we see clearly we're close, but we also have done the official measurements, the EPSI or SKI measurement. Last year, where you know, we were very close to Avanza them, and we actually beat them on some parameters like price worthiness and product quality. So let's see what this year will give. But of course, we're fighting all the time to overtake, and we close the gap.
Great. That's all for me. Thank you.
Thanks.
Thank you, Ermin. Next question comes from Andy Lowe at Citi. Please go ahead.
Hey, thanks for taking the questions. Mine's just on the FactSet partnership, so just curious how the partnership's structured, what are the financial implications? Appreciate you've just said it's a minimal-
That is not gonna be any material impact or-
No
... anything, but we have them. We're gonna use them as a partner for financial data. This is one track, but there's more to come, so to say, and so far, it's been a very good partner to us.
Is this available to only select customers, or are all customers able to get it?
All customers are able to get it.
Okay.
We democratize savings and investments, you know?
Yeah, yeah. Got it. And then, just curious, what, what made you go with FactSet over other data providers?
There's two things. I mean, of course, a negotiation, but also we know we verified also the quality of their data is good. So that's also an important parameter.
Got it. Okay. And then final question: you talk in your CEO statement about the introduction of currency accounts next year. Could you just talk through the financial implications from that?
Yeah, again, we don't foresee any major implications from that. It's mainly gonna be used by the more active traders. Today, most of those traders, when they trade, especially in the US, they use other platforms where they have a currency account. Of course, our expectation is when we launch the currency account, we can attract back that trading, especially US trading, into our platform. It might even be an upside over time.
Thanks. And, do you think that trading comes back to you with a little bit of a lag? So maybe you lose income at first, and then it takes a while for customers to migrate.
Let's see. Of course, it's gonna take a little bit, but we don't see by any means. I mean, I don't think it's gonna be any major impact. Because the most, I mean, the ones that trade the most and the most international trades, they are already - they do it outside of our platform because we don't have currency account. So, and for the normal customers, I think most will just use automatic FX, and don't do the hassle of exchanging and having foreign currency on their account. I think it might be a little spice to attract some more trading to our platform.
Got it. Thanks so much.
Thanks.
And just to put a number on what we see on cross-border trading, retail, they have about twice as high sort of percentage cross-border trading as heavy traders. So that tells us that heavy traders, they probably don't do way less, it's that they do it somewhere else. So data looks like we should be able to capture some business. Okay, thank you, Andy. Next question comes from Jacob Hesslevik at SEB. Please go ahead. Looks like you're unmuted, Jacob. Can you hear us? Okay, let's-
Okay.
It looks like Jacob has some issues with this. We'll get back to you, Jacob, next after, let's see. Enrico Bolzoni from J.P. Morgan, please go ahead, and we'll try Jacob after.
Hi, good morning. Can you hear me?
Yeah, can hear you.
Yes.
Hi. Morning. Thanks for taking my questions. So, one, going back to the multicurrency account, I just wanted to get a bit of extra color there. So, yeah, in terms of what cost a client has to set up these accounts, so is it free to do? I'm just trying to understand, because clearly, it's, you know, it's great that you can avoid paying FX fees, and I wonder-
Mm
... how easy and how expensive it is for the average retail customer to set it up? So that's my first question. And then, second question is on the FactSet partnership and, and, you know, offering information about, you know, analyst ratings, so on, so forth. How unique is this feature in the Nordic landscape? Is it something that many other players offer, or it's quite unique to Nordnet proposition at the moment? And then finally, I just wanted to ask your opinion on what implication there will be from the changes in taxation for ISK. Do you expect more clients maybe moving to this type of product? And if so, what sort of implication financially there might be for your revenues? Thank you.
Mm-hmm. Yeah, with the currency accounts, we haven't launched it yet, so of course, we don't have all the details exactly how it's gonna look like. But we already have currency accounts, you know, on the normal depot account. So the non-tax wrappers. And it's fairly easy to set up, but it's overall only used by the more active traders. The normal trader just do the auto FX, where they see it's no hassle, and the cost is not that high. So exactly how it's gonna look like on the wrappers, we will of course have to come back to. FactSet, yeah, it's unique, and it's been a very asked-for feature, so we are happy to launch that now.
And I think, it's gonna support, of course, if you want to trade, then that you can get, the analyst view, both by wholesale, mix, but also the target price range. And-
Sorry, on this FactSet feature, by unique, you mean it's unique the fact that you have it with FactSet, so other players don't have FactSet?
No, no, I know-
It's quite unique, the type of product.
... It's unique in itself-
The product
... as a product, yes.
Thanks.
And then taxation, it's gonna be in two steps. So the first, next year is 150,000 SEK that you don't need to pay any fees on, and next, the year after that is up to 300,000. So, but I think overall, it, it's gonna boost probably activity and start savings in, not, in some segments. How much? That's of course hard to tell, but it's of course a positive thing that it's you don't have to pay any fees on the lower amounts on ISK and KF.
And can you remind me the profitability of an ISK account versus, let's say, an account which is not tax wrapped? Is it the same for you, roughly speaking?
Yeah, it's about the same. So it's the same fees basically on both accounts. So it's more for the customers that's more efficient to, tax-wise, to do it on that.
Thank you. Very clear. Thanks.
Great.
Okay, great. Let's try Jacob Hesslevik from SEB again. I'll try to unmute you. Please go ahead.
Can you hear me now?
Yes, we can. Great.
Yep.
Ah, perfect. Good morning, everyone.
Mm-hmm.
If we continue with NII, the guidance for this year is unchanged. So could you help me understand how disposing of your unsecured portfolio, which has yielded + 7%, which will now be invested in your liquidity portfolio, which yields at the Swedish three-month forward rate, do not affect your NII more negatively?
Yeah, but we. It's only gonna be for quarter. We're also a little bit stronger on the plus, compared to we were last quarter. We also more lending volumes than last quarter. So all in all, even though we have a little bit lower interest rate plus and a little bit lower total yield than on the private loans, in sum, we're gonna be on the two point six, basically, like the quarter two outlook.
Okay, so it's a volume driver there. We-
You need to look at all the aspects, deposit volume, lending volume, and.
Okay.
Yeah.
Good. And I think this is what Ermin asked before, but just to be crystal clear, are the calculations purely mechanical on forward rates, or do you increase the NII sensitivity as more and more deposit rates reach 0% in future quarters?
No, correct me if I'm wrong here, Marcus, but it's more just using the assumption we have in the outlook today.
Yeah, pure mechanical. So the one point nine that Lars-Åke said, that's basically just taking the interest rate curve with stable volumes, not making any adjustments like that. So that's the low it would go, assuming these rates and no volumes. And of course, if there's volume upside there.
But-
And-
Then you could also assume that you will stop paying deposit rates, so you can't lower the deposit rate on ISK accounts for private banking clients, for example. That would hurt you more, correct?
That is included in the, in that figure.
Okay, that is included.
Yeah.
Okay, good. And then my final question is on cost. In the quarter, it was almost flat versus Q2, despite you mentioned in earlier reports that you would start your marketing campaign in H2 this year.
Yeah.
So you're not doing the marketing or the cost back-end loaded in Q4, or is it first in 2025?
Yeah
... we will see the cost increase?
Yeah, but overall, so far this year, there has been an increase versus last year. But it's gonna be a bigger step up in quarter four. And we're working on the new campaign concept that we're gonna launch end of this year or beginning of next year. But we do a lot of additional other marketing things as well, and not least related to the two million campaign that we ran in September. But I know, Marcus, the exact figure for marketing that we estimate in quarter four is around SEK 50 million .
That's right. So it will be at the beginning of the year, we said we would end up at a hundred and twenty or so for the full year, but it's gonna be then a hundred.
Yeah.
... All right. Thank you very much.
Thank you, Jacob. Okay, the next question comes from Ian White at Autonomous. Please go ahead.
Hi there. Thanks for taking my questions. Just a couple from my side, please. Firstly, in terms of the promotion you ran in August and September-
Mm.
Just crunching through some of the numbers, SEK 11 million spent with a SEK 200 incentive, got me to 55,000 clients. That's a ballpark. That's about the same as your entire net new customer growth in August and September. You know, if you hadn't run the promotion.
Mm
... then you'd have got 35,000 new clients or so, based on trends we've seen year to date. So, so net-net, it looks to me like you've maybe spent SEK 11 million more to get about 20,000 more clients, or a CAC of about SEK 550, which is, which is high by your standards.
Mm.
Per your earlier comments, it sounds like at this stage you're not sure of the quality-
Mm
... of that cohort versus the people that you've typically onboarded. So, the first question I guess would just be if you could just elaborate a bit around the thinking there, please, and obviously correct any of my thinking or assumptions that are incorrect. That's question one. And just secondly, in terms of some of the innovations that you mentioned in today's statement, the integration of the FactSet data and the new trading protocols-
Mm.
I think you've spoken to this in part in response to a previous question.
Mm.
But can you just elaborate a bit more and tell us about how those ideas and innovations have actually come about? Is it something that your clients have asked for, for example?
Mm.
It sounds like the analyst information is unique. Less clear on the trading protocols, but just the thinking behind introducing those onto the platform-
Mm
... why they're important, would be, helpful. Thanks very much.
Yeah, I think when it comes to the two million campaign, I think we about to double. It was primarily in September, where we basically doubled almost the customer intake then. So CAC is probably 400 if you look at that, so 50% then coming from the new campaign, but we also then had to pay for the other customers, but anyway, so far, it was a little bit of a experiment, for sure, but also to drive brand awareness a little bit on Nordnet instead of just spending it on media campaigns.
But so far we are a bit possibly a bit surprised, actually, that, like I said, a little bit younger, a little bit less deposits, and a little bit less activity, but not as much as we thought, actually, so far I would say it's been a good campaign, and it's also made a little bit buzz in the market, which is also good for brand awareness, and especially in Sweden, we saw a very big take-up, where we have been struggling a little bit in especially the younger segments, so of course we're gonna follow this over time and take learnings, but yeah, so let's see. I think different kind of campaigns can be an option, but of course it needs to make sense, financially, for sure.
Innovation aspect, I mean, we you know we talk to our customers all the time, and and we always have a list of things that we look at them and prioritize. It's been, of course, a lot of focus on Shareville during the spring to integrate that and build a lot of new, nice Shareville functions. That's been very appreciated. But then we prioritize now what we've seen, especially the analyst ratings and target price has been very asked for, and so we put that as high priority. But also, the algo trading has been for the more advanced customers, is something that they really want, and they want it for some time.
And we will have a very good service also in cooperation with Citi to implement that. So both the normal algo, VWAP, TWAP POV , but also a dark pool, full dark pool or dark lit trading in different algorithms. So that's gonna be very exciting. And then as the currency accounts, which has also been asked for, especially, I mean, it's mainly from the more active traders as well.
That's great. Thank you.
Thanks.
Great. Thank you, Ian. Next question comes from Bruce Hamilton at Morgan Stanley. Please go ahead, Bruce.
Hi there. Thanks for taking my question. Just had a couple of quick ones on the sort of fund business. You talked about stability in margins helped by the fact that you're selling quite a lot of Nordnet index products.
Mm.
Can you remind me what sort of margins you're typically charging on that? Is it around 25 basis points? And then secondly, in terms of, you know, product innovation for the fund business, how are you thinking about that? Obviously, at an industry level, there's quite a bit of focus on active ETFs, on sort of private market content for wealth clients. What are you hearing from customers there, and what? Is there any area that you're kind of excited about as a, you know, potentially driving positive margin mix over time?
Yeah, so for fund business, I mean, our own fund business, we have, I mean, especially on the index side, a higher margin than the customer would buy an index fund outside of our portfolio. I won't say exactly the margins, but the price to the customer is the same as an external index funds, but our margin is better since we produce it ourselves with the help of partners. But we also try to be innovative, as you know, on the index side. So we have the global index with some leverage in it. It's been very popular, where we can price a little bit higher. We have had a tech index, which is also very popular.
I think we are the only one that's having that, also priced a little bit higher. And we have index of index, our One fund portfolio that's really flying, and it's performing really well, and where we also have a higher margin. So it's a combination that there is lower production cost for us, but also that we've been innovative in how we put the portfolios together. Product innovation, I mean, I think, there's a lot of things happening all the time, and we have a lot of exciting things that will come out also next year. I won't talk about all of that here for competitive reasons.
But of course, private market access is one area that we've been looking quite a bit on, and we have a cooperation, as you know, with EQT in Sweden, with our EQT Nexus fund. That's been popular in the private banking segment, so it's a more liquid private banking fund of funds of the EQT fund. So that's I think it's quite a good setup actually for also getting capital from more self-serve customers into product like that.
Got it. Helpful, thank you.
Thank you, Bruce. Next question comes from Nicolas Vauthier from Exane. Please go ahead. Hey, Nicolas, I think you need to unmute on your side as well.
Can you hear me now?
Yes, we can. Thank you.
Sorry for that. Just one question on the dynamics in Sweden.
Mm-hmm.
I've seen that the flows in customer recruitment remains a bit underwhelming versus other countries. And I would like to know if you have concrete plans to address this beyond your September marketing campaign?
Yeah. I mean, in Sweden in general, we're very strong in the higher-end segments. So we have more savings capital and higher revenue per customer in Sweden. And we're going to develop that segment as well. That's why we launched a number of exciting features for that segment. Also, it's a profitable segment, so we would never let go of that. We maintain a strong position and grow high-end in Sweden. But at the same time we move a little bit more into the saver segment, that mainly invest in funds and pension. And as you know, we put a lot of effort both in the pension business and the fund business, and we see traction also there in Sweden.
We see a lot of traction outside of Sweden, but also traction in Sweden, and not least, also the two million campaign was really successful in Sweden, so I think it's combination, then in Sweden, we really focus on the high end and grow that segment, but we will also then take more customers in the savings segments, in pension and in funds.
Wouldn't it make sense to refocus a bit the investments in the lower wallet size segment, given how intense the competition seems to be in Sweden for the private banking business, for instance, with both new entrants and incumbents?
Yeah, but then we are-
Yeah
But still, I think you know the people with the interest in the markets and trade quite a bit. It's a lot of people in Sweden, and we want to be strong in that segment. We've always been strong there, and we're going to continue to be strong. But that said, we do expand into the saver segment. We have a fantastic growth in the fund business. We have really good growth in the pension business in Sweden, but also outside of Sweden. So that will continue that focus as well, for sure.
And, a follow-up on the private markets questions. Have you imminent plans to add the new asset classes or new fund provider to the platform.
Yeah, let's see how that plays out over time, but the main product we have now is EQT Nexus. It's a cooperation with EQT, and their fund of funds of their EQT funds. But we also have some liquidity in the funds. You can also sell on a quarterly basis, after a certain lock-up period. So it's been a very popular product so far.
Okay. And, just quickly to finish, on the fund business, what I get from your comments for this quarter and the explanation of the slight uptick in the fund margin-
Yeah
... is really the mix towards your own branded funds, rather than, for instance, seeing an uptick in the interest for active funds.
I think you still see that shift from active to passive. It slowed down, though, but.
Yeah
... it's mainly that they're buying our own index funds. But I think, like I said, between the quarters, accruals and little other things can distort the picture a little bit on the model between quarters. So you should look a little bit over the years. So over the year, we've been around 25 basis points, so we're being there also last year.
All right. Thank you very much. Have a good day.
Thank you.
Thank you, Nicolas. Next question comes from Michael McNaughton at UBS. Please go ahead.
Hey, can you hear me?
Yeah.
We can.
Cool. Just coming back on the multicurrency accounts, if I remember from last quarter, I think you mentioned that around 30% of the brokerage income comes from kind of foreign currency-related trading.
Mm.
And then this quarter, you mentioned that the retail trade is about two times as much-
Mm
... so about a third of it-
Mm
- is heavy traders.
Mm.
Does that mean that the currency accounts should impact around 10% of the current brokerage income, or would it be a smaller selection of that because it's just the ISKs and the endowments?
Yeah-
Just-
... I think it's gonna be smaller because, you know, we've had currency account on the non-wrappers for a very, very long time. And outside of Sweden, a lot of trading is being done on those accounts. So, and the main take-up on the currency account has been the more active traders with, of course, a little bit more money traded as well. Where for the retail, it is, it's not worth the hassle. It's still good FX, and it's just easy to do it automatic when you do the buy or sell. So I think we...
Like I said, we potentially even have an upside with launching currency accounts on ISK, KF, because those traders that are more heavy traders and wanna use currency account on those wrappers, they're not with us with other platforms. So hopefully we can attract some of that capital back to, or trading back to, you know, Nordnet.
Okay. But there, there's no kind of... You can't share any hard number and-
Yeah, I cannot share any hard number-
Percentage
... but I don't think it's gonna be material. It might even be slightly positive, but let's see how it plays out.
Okay. And then maybe just a follow-up to the kind of discussion around the private banking offering. Why, why is it that you think you are so strong in Sweden? Is that just historical, or is there... what do you see as your offering there that is kind of outperforming peers, and where do you see that kind of progressing as previously the competition picks up?
Yeah, it's a good question. Perhaps we've been a bit positioned versus Avanza, since they focus a lot on the savers, but we build a strong position. We have a very good platform. We have a lot of good features, very stable platform, but we have very nice features for them, and we constantly launch new features, like I talked about now, but there's more to come as well, but that said, I think we also have the potentially safest thing, but in Sweden, with the focus on the fund business and pension business that we have, and we saw that with the two million campaign, for example, we got a lot of traction, also in Sweden on that, in the more younger saver segments.
Great, and then maybe just a final one. Obviously, there's chat from your peer about expanding-
Mm
... into new markets.
Yeah.
And I think it's fair that with your geographical distribution, it's not as big a concern for you right now, but-
Mm
... is there an argument to be made that instead of waiting until it becomes a problem, you should be thinking about expanding outside of the Nordics, or, or-?
Yeah
... are you pretty happy where you are?
Yeah, I mean, you know, we have 6% market share in a growing savings market. That's in 2020, it's gonna be around SEK 20 trillion . And we really want to complete also the one-stop shop in the Nordics with Livrente now launched as one of the last pieces there. So the focus is gonna be on the Nordics. That said, of course, we are a multi-country platform. We could open a new country in a like a manageable way. But the focus here now is on the Nordics.
Okay, great. Thank you.
Thank you, Michael. I think that's the last question of the day. So, thanks everyone for calling in. Yeah, please visit our website, nordnet.com, if you have any questions, or reach out to me. So thank you for your interest in Nordnet, and have a nice day, and goodbye.
Thank you.