This article first appeared on GuruFocus .
-
Adjusted Core Operating Profit:SEK 1.5 billion, up 21% year-on-year.
-
Core Return on Equity (RoE):27% (29% on core capital employed).
-
Organic Loan Growth:11% year-on-year in local currencies (12% reported).
-
Net Interest Margin (NIM):Underlying NIM of 8.2% (reported 8.1%).
-
Cost-Income Ratio:23%, flat quarter-on-quarter.
-
Cost of Risk:2.5% in Q2 (2.4% excluding SEK 42 million macro provisions); ninth consecutive quarter of year-on-year improvement.
-
Common Equity Tier 1 (CET1) Ratio:13.4%, 3.2 percentage points above regulatory requirements.
-
Private Loans Segment Growth:11% year-on-year in local currencies; portfolio nearing SEK 100 billion.
-
Credit Cards Segment Growth:11% year-on-year in local currencies; portfolio at SEK 21.1 billion.
-
Secured Loans Segment Growth:12% year-on-year in local currencies (11% quarter-on-quarter).
-
Fee and Commission Income:SEK 290 million, up 10% year-on-year.
-
Operating Income Growth:13% year-on-year.
-
Cost Growth (excl. DBT):17% year-on-year (20% reported).
-
Liquidity Coverage Ratio (LCR):193%.
-
Net Stable Funding Ratio (NSFR):110%.
-
Warning! GuruFocus has detected 1 Warning Sign with CHIX:NOBAs.
-
Is CHIX:NOBAs fairly valued? Test your thesis with our free DCF calculator.
Release Date: August 18, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Adjusted core operating profit rose 21% year-on-year, with core RoE at 27% and 29% on core capital employed.
-
Organic loan growth reached 11% in local currencies, with all segments contributing, especially credit cards in Germany and mortgages in Sweden and Norway.
-
Cost of risk improved for the ninth consecutive quarter, coming in at 2.5% (2.4% excluding macro provisions), at the lower end of the normalized range.
-
Strong capital position with CET1 ratio of 13.4%, 3.2 percentage points above regulatory requirements, and the board is evaluating a share buyback program.
-
Successful bond issuance with tighter spreads, and a clear path to achieving the 30% core RoE target through risk-adjusted margin improvements and cost efficiency.
Negative Points
-
Cost-income ratio remained at 23%, slightly up from 22% in Q2 2025, with cost growth of 17-20% year-on-year due to transitional investments and temporary factors.
-
Net interest margin (NIM) saw a slight decline to 8.16% on a like-for-like basis, impacted by delayed pass-through of rate increases in Norway and Denmark.
-
Secured segment's NIM is slightly negative year-on-year due to the mix shift towards near-prime mortgages, though risk-adjusted margins are attractive.
-
Trading income was negative in the quarter, with a normalized run-rate expected to be negative $15-25 million per quarter due to hedging costs.
-
Deposit growth lagged at 1.5% year-on-year, though management does not foresee a significant shift in funding mix.
Q & A Highlights
Q: Can you provide ballpark guidance on the size of the cost takeouts planned for later this year, and when in 2027 should we expect the sub-20% cost-income ratio target to be reached? A: CFO Patrick MacArthur stated that the cost-income target will be reached during the second half of 2027. He declined to give a specific number for the cost takeouts but emphasized that the company will need to have "very disciplined cost growth in 2027" to achieve the 20% target, implying a significant slowdown from current growth rates.
Q: Regarding the potential share buyback program, can you explain the timing of this announcement and whether the CET1 target range might be reviewed given the current buffer level? A: CEO Jacob Lundblad explained the timing is to ensure equal information to all stakeholders, as the process requires applications to authorities like the SFSA. CFO Patrick MacArthur added that the company is comfortable at the lower end of the 13%-15% CET1 range due to high profitability and that the 13.4% ratio grows quarterly from organic capital generation, making buybacks a logical tool for managing excess capital.
Q: To reach the 20% cost-income ratio in 2027, does the plan require essentially zero cost growth versus the current Q2 run rate, and is that the right way to think about it? A: CFO Patrick MacArthur confirmed that the company expects "very low cost growth in 2027" to hit the target. He noted that the current year has unusually lumpy cost takeouts due to commercial priorities, but the plan is to achieve a more even cost takeout trajectory going forward, with the full effect of savings impacting towards the end of 2026 and into 2027.
Q: Can you elaborate on the delayed pass-through of rate increases in the private loan business and its impact on NIM? A: CFO Patrick MacArthur explained that base rate increases in Norway and DKK in Q2 create a temporary headwind. The funding side reprices quickly, but asset-side repricing takes 4-6 weeks in Denmark and 8-10 weeks in Norway. This caused a slight NIM dip to 8.16% in Q2 from 8.23% in Q1, but it is a short-term effect that will normalize.
Q: You mentioned signing an NPL sale of 400 million with a positive impact in Q3. Can you guide on the size of that impact? A: CFO Patrick MacArthur confirmed the profit will be booked on the credit loss line and will be in the "mid-double-digit type range." He noted that recent NPL sales have typically generated meaningful profits compared to book value.
Q: The DBT corporate loan book showed sub-1% growth quarter-on-quarter. Is that the ambition, and how should we think about its growth potential? A: CEO Jacob Lundblad stated that the ambition is for DBT to fit the overall financial profile, so more growth is expected. The slow quarter reflects that DBT was previously optimized for liquidity, not profitable book growth. The company is now focusing on commercial initiatives, forward lending, and entering new segments previously unavailable due to high cost of funds.
Q: Regarding the secured segment, how much more mix shift to near-prime mortgages should be expected, and is there a structural floor for NIM? A: CFO Patrick MacArthur reiterated previous guidance that NIM in the secured segment will be stable from the current level. He stated, "We think NIM will be stable from the current level in secure," indicating that the mix shift has largely played out.
Q: On trading income, it was negative this quarter. What is a normalized run rate, and what is driving it? A: CFO Patrick MacArthur guided that the normalized run rate is negative 15-25 million SEK per quarter, though it is volatile. The negative income is driven by the cost of holding swaps used for hedging purposes.
Q: Are you seeing any shift in customer behavior between transactors and revolvers in the credit card business given the high-rate environment? A: CFO Patrick MacArthur stated there is no visible macro effect or shift in transactor/revolver behavior. However, the company's strategy is to gradually increase the revolver proportion over time, working consistently with the transactor-revolver split.
Q: Are the new product launches scheduled for 2027 (Norway mortgages, Finland corporate deposits, etc.) already costed into the current cost plans? A: CFO Patrick MacArthur confirmed that these initiatives are taken into account in the cost outlook. They will not suddenly drive costs in a different direction than the company's current expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
