New economic reality
Global uncertainty, new technologies and rising customer expectations are reshaping what people look for in a financial partner. In a more uncertain macroeconomic and geopolitical environment, trust becomes more important. Households and corporates seek financial services providers that are resilient, well capitalised and able to navigate changing conditions with confidence.
After several years of elevated inflation and an exceptional interest rate environment, conditions in the Nordic economies stabilised during 2025. Inflation in the Nordic countries remained broadly stable and close to the 2% mark, allowing central banks in the region to continue lowering interest rates. By the end of the year, most appeared to have completed their rate-cutting cycles. Policy paths now look steady, with rates normalising at around 2% – with the exception of Norway, where they are close to 4%.
Public finances, however, remain under strain on both sides of the Atlantic. In the US, the budget deficit has widened significantly since the pandemic, with debt levels rising rapidly – a trend unlikely to reverse without major policy changes. In Europe, higher defence spending and green transition investments are adding further pressure. As a result, long-term interest rates are expected to stay elevated or even climb, despite inflation being largely under control.
In this environment, financial strength matters. In recent years, we have invested to build a safer and more resilient business, with a well-balanced income mix across our home markets. We continue to adjust our pricing and product mix in response to the rate environment, and use hedging to help manage interest rate risk and mitigate the impact of fluctuating interest rates on our financial performance
