High business momentum in uncertain times

We are now well into autumn, with the leaves turning red and daylight becoming limited. But this autumn is different. To many, the world has become more uncertain and some people feel less safe than before, personally and financially.

In the third quarter central bank policy rates in Denmark and Finland turned positive, following those of Norway and Sweden in previous quarters. Although the higher interest rates will dampen economic activity in the midterm, they should also be seen as a healthy adjustment gradually returning us to more normalised market conditions in the long term.

We expect this trend to continue in the coming quarters as interest rates are likely to continue to increase in all four countries.

In the third quarter we maintained high business momentum and volume growth in line with our business plan and key priorities.

Lower consumer activity was clearly seen in the Nordic housing market. The slowdown was most pronounced in Sweden, where house prices declined by around 5% compared with last year. Despite this, we grew total mortgage lending volumes by 4% in the third quarter and again increased our market shares across the Nordics.

The combination of our high proactivity and customer demand led to a clear corporate lending growth in the quarter. Corporate lending grew by 12%.

Our strong performance over the first three quarters of this year means that we have updated our outlook for 2022. The cost-to-income ratio for the full year of 2022 is now expected to be 48–49%. Our return on equity outlook for 2022 is unchanged and will be above 11%.

We are committed to reaching our 2025 financial target of a return on equity above 13%.

The visibility in the current environment is low and we expect this to continue during the coming quarters. However, we are well positioned to weather more difficult economic conditions, and we are here to support our customers and the Nordic societies.

That is our way forward - to be the preferred financial partner for our customers. In both good and challenging times.