Good morning, everyone. Hope you can hear me all right. Welcome to Swedbank's Q3 2026 pre-close call. I'm Maria Caneman, Head of Investor Relations here at Swedbank, and this will be an audio-only Teams call, which is being recorded. The script used for this call will, per usual, be published in the Investor Relations website after the call. We will be focusing on the events during the third quarter, relevant public data, macro trends in our markets, go through macro indicators, P&L, and also a few other comments where relevant. We would like to highlight that we only refer to already disclosed information or publicly available data. To start off, there is, as you know, one more day in this quarter compared to the previous one, this is resulting in a positive impact on NII and NCI.
If you look at average day count effects, it's around SEK 70 million a day on NII and around SEK 20 million a day on AUM. Starting with the macro trends. On FX, as of September 30, the Sw edish krona had depreciated from end of June versus the U.S. dollar and the euro, and on average, compared to last quarter, the krona depreciated versus both the dollar and the euro. For P&L, the average quarter-on-quarter development is the relevant number to track. The Riksbank policy rate was left unchanged at 1.75% during the quarter, and ECB raised its policy rate to 2.5% on September 10. As of September 29, the three-month STIBOR rate had increased by 11 basis points, while the six-month EURIBOR rate was up by 53 basis points.
Looking at average quarter to date compared to last quarter, the three-month STIBOR was one basis point lower, while six-month EURIBOR had increased by 23 basis points. Moving on to NII for Sweden. Mortgage list prices in Sweden were raised on September 18 by 13 basis points -25 basis points on fixings longer than three months, while the three-month fixing was left unchanged. This follows decreases in the second quarter by 5 basis points- 15 basis points, of which interest rates on three-month fixings were lowered by five basis points. All this information can be found on our website, and I would encourage you to visit continuously because we do show most of our offering there, and that's where you can find the most up-to-date information.
Actual mortgage prices decreased by six basis points on the three-month fixings in the first two months of the quarter, following an increase of seven basis points in the previous quarter. On deposits in Sweden, rates were unchanged in the quarter, and we pay 0% on transaction accounts as well as e-sparkonto accounts. Turning to mortgage volumes and public statistics, Swedbank's volumes in own channels in the first two months of the quarter, excluding savings banks on our balance sheet, but including Stabelo, increased by SEK 5.3 billion, corresponding to an average front book market share of 19%. Swedbank's corporate lending grew in the first two months of the quarter by SEK 2.8 billion, corresponding to an average front book market share of around 22%. Retail deposits in Sweden decreased in the first two months of the quarter by SEK 10.6 billion, and Swedbank accounted for SEK 3.6 billion of this.
Corporate deposits in Sweden decreased in the first two months of the quarter by SEK 4.7 billion, of which SEK 1.2 billion in Swedbank. Turning to the Baltics. According to data provided by ECB, total lending in the Baltics in July increased by 13.5% year on year, private lending by 12.6%, and corporate lending by 14.4%. Total deposits in the Baltics in July increased by 10.6% year on year. Private deposits grew by 12%, and corporate deposits by 8.7%. Regarding retail deposit rates, we paid 0% in interest on transaction accounts, while Easy Saver accounts paid 1.5% in Lithuania, 1.75% in Estonia, and 2% in Latvia. During the quarter, rates on longer fixings were raised in Latvia by 10 basis points- 100 basis points and in Estonia by 25 basis points- 35 basis points, while they remained unchanged in Lithuania.
Please let me remind you of the timing effects of interest rate changes in that the negative effects from interest rate increases materials ahead of the positive effects, as has been repeatedly pointed out by our CFO. Moving on to net commission income. First of all, a kind reminder that asset management commissions are generated by daily fees. Looking at average values of the stock market development, which impact our asset management fees. On average in the quarter compared to the average of the second quarter, the Swedish stock market increased by 4.8%, while the U.S. and European stock markets increased by 4.8% and 4.5%, respectively. On FX, just a reminder here on that component, where the Swedish krona had depreciated by 3% versus the USD on average compared to the second quarter. This should be considered when assessing the U.S. stock market changes.
According to statistics from the Swedish Investment Fund Association, the Swedish mutual fund market had net inflows during July and August of approximately SEK 42.5 billion, compared to an inflow of approximately SEK 63.3 billion in the second quarter. The trend with inflows to index fund and fixed income, both long and short term, continued, while outflows in actively managed equity funds remain. Swedbank Robur had continued net inflows in July and August, with the market share between 11%- 16% of the total market net inflow. Robur's back book market share of AUM at the end of August was 21.7%. On to cost. Our full year 2026 cost guidance is around SEK 27.5 billion, excluding extraordinary items. At Q2 we said at current levels, the full -year FX effect is estimated to add around SEK 200 million versus guidance.
Please keep this in mind, and the krona has depreciated even further since. The cost guidance excludes the settlement to pay USD 50 million to the New York State Department of Financial Services, which was booked here during the third quarter. Also the cost guidance excludes the SEK 1.3 billion extraordinary cost for the restructuring program that was announced in the first quarter. We booked a little over SEK 800 million of those in Q2, and the remaining is mostly direct cost that will be spread over the rest of 2026. Bank taxes, we continue to accrue 100% of the bank tax in Latvia, so around SEK 17 million per quarter. If any threshold for discounts will be reached, this will be booked as reversals in Q4, so similar to last year.
On asset quality in Q2, the post-model adjustment decreased and stood at SEK 161 million by the end of the quarter. Let me also remind you of the positive revaluation of expected credit losses of approximately SEK 0.5 billion to be recognized here in the third quarter, as announced already in the press release, because this is due to the sale of Entercard's back -book of non-performing loans. You have all the details in the press release, but the credit loss revaluation will be recognized already in Q3. On capital, I would like to just mention that the balance sheet is affected by end of period FX rates, mainly via RWAs from the Baltics that are denominated in EUR. As mentioned earlier, the Swedish krona has weakened versus the EUR in the quarter.
Let me also flag to you, this is what we said in the Q2 report, that a reorganization of the business area Swedish Banking and wealth management has been done. The restatement file for this is being published during today on our investor relations page on something called Investor News. This is neutral on group level, but for those of you who want to look into the business areas, the restatement file will be available today. That was all for the pre-close call. Please note that we go into silent period on October 9. If any questions, feel free to reach out before that. I see that we have a question here from Magnus. Please go ahead. See if I need to allow you to unmute or if you can unmute. Let us see. Are you able to unmute, Magnus?
Sounds like you are not. See if I can do it this way then. There we go. Now you should be okay, Magnus.
Now do you hear me?
Okay, try it again, Magnus. Yes, now it's working.
Yeah, okay. You have to unmute us, I think.
Yes, I did, but it didn't seem to work, but please go ahead.
Okay. Just two questions. First of all, on capital, whether you will publish your SREP like SEB did yesterday evening. I think you used to do that. Secondly, if there are any regulatory issues or anything impacting RWAs quarter-on-quarter we should be aware of. Secondly, I don't know if you mentioned it, the remaining SEK 440 million in restructuring charges for the second half. Have you said anything about how that will be distributed between Q3 and Q4?
Thank you. I will start with the SREP. No, we will not be publishing that separately. We will going forward be publishing that in our quarterly reports, so no update on that until Q3. No further items to point out on risk-weighted assets, I believe, apart from the restatements and these things, but those are neutral on group level. What was that on again? Sorry, could you repeat the last question?
I was just on the restructuring charges, the-
Restructuring charges. Yes. No.
-if you had indicated anything.
We have not said anything else. They are more than that. They are direct costs. So all the provisioning that was the big part was already booked in Q2, as you know. We have not guided on specifically how it falls between the quarter. It will be distributed over Q3 and Q4.
Okay. Thank you.
Thank you. Next in line is Andreas.
Morning. You talked about these timing effects that you said your CFO has been flagging, but isn't that related to the cover bond funding and the pricing of it? Shouldn't we expect that the cover bond funding turn cheaper during Q3 compared to Q2? I think you priced at 207 basis points in Q2, and you should be at 201 basis points now in Q3. While you said that your mortgage prices were down, but net without a month of previous quarter, you are actually up one basis point. So wouldn't we see a positive timing effect in this quarter? That is my first question.
The timing effect that our CFO is mainly pointing to is that when market rates move now ahead, but policy rates are staying that you see in Sweden, where you saw the negative effect in Q2. Now Q-on-Q, that should not be a big effect versus STIBOR, which has been on average flat. You see that effect on EURIBOR, where EURIBOR has moved ahead of the ECB rate change. That type of timing effect because we are not repricing until the policy rate change typically. That is the kind of dynamic. Then you have, if you are looking at wholesale funding the way we usually, that is affected also, of course, by the increasing EURIBOR. Then you need to add, of course, increasing volumes on that as well Q-on-Q.
Yeah. I follow in Sweden, so my first question was on Sweden. We should not have negative timing effects in Q3, which we had in Q2. But then in the Baltics, have I misunderstood, or are not you repricing your loans according to EURIBOR? Given it is six months, it is one -sixth every month automatically. So should not that be repricing as we speak?
Yes, but I was still referring to the wholesale funding aspect of it as you see higher funding costs. But yes, you are right on the repricement mechanism versus EURIBOR.
You said that EURIBOR up 23 basis points in the quarter, but that is irrelevant, right? Because we should see the people in Q3 repricing from what they came from Q1. So is not the repricing that is going to happen in EURIBOR some 70 basis points really?
Versus EURIBOR, we are repricing. That dynamic is correct if you are looking on the deposit side, that is versus six months EURIBOR.
Yeah. Okay.
My comment was also on the overall funding because you have wholesale funding costs, which is also dependent on where the EURIBOR is.
Yeah, not in the Baltics because they are only deposit funded, right?
Exactly. Depending on where you are in the Baltics. Yes.
Okay. Then I think we have the same view. Thanks.
Yes.
That is it.
Next in line, Sofie.
Yeah. Hi, thanks a lot for taking my question. My first question would be also on kind of your funding side. Can you just walk us through how your wholesale funding is hedged? So when we see kind of higher EURIBOR rates, weaker SEK, is that risk kind of fully hedged with cross currency swaps, or how should we think about the impact?
Good question. I think I might have to come back to you a little bit on the hedging side of things, on the technical aspects of it. So maybe I can come back to you on that question.
Yeah, that would be great. My second question would be on funding. Did you do any material like funding in the quarter? If so, how should we think about the kind of funding that was done in Q3?
Yes, we have done a few. Let's see, we did a Tier 2 transaction that we did here in September, and I don't have top of mind all of us, but we have on our website, I believe we have all those. But we have been acting in the funding market, but nothing sort of out of the ordinary apart from maybe the Tier 2 transaction, which is a little bit more rare ahead of a call coming up next year.
Okay. Then my final question, I know you said there was nothing in terms of capital, but is there any update on the Baltic models?
No, we have no update on that. So nothing there, sorry.
Okay, great. Thank you.
Thank you. Riccardo?
Yes, Maria, thanks. Thanks for taking my question. Just a very quick one. Among the values one-offs, especially on the Department of Financial Services, the USD 50 million, the restructuring cost, the provisions from the release of provision from Entercard. Is there any fiscal effect on all of these? Are they tax deductible and especially with the special reference to the USD 50 million?
No, they are not tax deductible.
Okay.
Thank you very much. I believe that was the last question. As I mentioned, silent period starts October 9, and we will release our third quarter report on Thursday, October 22 at 7:00 A.M. CET in the morning, and the analyst call will be hosted at 9:30 CET. Thank you so much for attending, and wish you all a nice day.