Earnings call transcript: Mandatum’s Q2 2025 results show growth in fee income

Mandatum reported its second-quarter 2025 earnings on August 14, showcasing a significant rise in fee income and improved operational efficiency. Despite a decline in profit before taxes, the company maintained a strong return on equity. The stock saw a 1.29% decline in pre-market trading, reflecting mixed investor sentiment following the earnings release. According to InvestingPro data, the company’s shares have delivered an impressive 55.3% return over the past year, trading near its 52-week high of $7.29.

Key Takeaways

• Fee income surged by 26% year-over-year to €18.5 million.
• Profit before taxes decreased to €34.2 million.
• Mandatum launched a new European high-yield fund and expanded its presence in Luxembourg.
• The cost-to-income ratio improved, dropping to 53%.
• The stock price fell by 1.29% in pre-market trading.

Company Performance

Mandatum demonstrated solid performance in Q2 2025, particularly in its fee-based business, which saw a 26% increase in income year-over-year. This growth was driven by the launch of new financial products and expansion into European markets. However, profit before taxes fell to €34.2 million, highlighting some challenges in maintaining profitability amid market volatility. The company improved its cost-to-income ratio significantly, enhancing operational efficiency.

Financial Highlights

• Revenue: Not disclosed
• Earnings per share: Not disclosed
• Fee income: €18.5 million, up 26% year-over-year
• Profit before taxes: €34.2 million
• Return on equity: 7.6%

Outlook & Guidance

Mandatum set ambitious financial targets for 2025-2028, aiming for a return on equity above 20% and over 10% compound annual growth in capital-light profit. The company plans to maintain a solvency margin between 160-180% and expects cumulative shareholder payouts to exceed €1 billion. These targets reflect a focus on capital efficiency and expanding its fee-based business model.

Executive Commentary

"Our vision is to be the fastest growing Nordic asset and wealth manager," stated CEO Petri Nemisfirtat, emphasizing Mandatum’s strategic focus on growth and innovation. CFO Matt Ahokas added, "Despite the turbulent markets, we continue to consistently generate capital," highlighting the company’s resilience in challenging conditions.

Risks and Challenges

• Market Volatility: Ongoing market fluctuations could impact profitability and investment performance.
• Currency Fluctuations: A weaker US Dollar affected approximately 25% of client assets under management.
• Competitive Pressure: As Mandatum expands internationally, it faces increased competition from established players in the asset management space.
• Regulatory Changes: Evolving financial regulations in Europe could pose compliance challenges.
• Economic Uncertainty: Broader macroeconomic pressures may affect client investment decisions and asset inflows.

Mandatum’s Q2 2025 results highlight its robust fee income growth and operational improvements, although challenges remain. The company’s strategic initiatives and ambitious financial targets position it for future growth, albeit amid market uncertainties.

Full transcript - Mandatum Oyj (MANTA) Q2 2025:

Lotte Burustrem, Investor Relations Lead, Mandatum: Good morning, and thank you for joining Mandatum’s Q2 twenty twenty five audiocast. My name is Lotte Burustrem, and I lead Investor Relations here at Mandatum. I am pleased to be joined by our CEO, Petrin Nemisfirtat and CFO, Matt Ahokas, who will walk you through the highlights of our second quarter, after which we’ll take the Q and A, where you have the possibility to dial in for any questions. Without further ado, I would now like to hand over to our CEO, Petri Nemis Firtha, who will take you through Mandatum’s key achievements and developments for the second quarter. Petri, the floor is yours.

Petri Nemisfirtat, CEO, Mandatum: Thank you, Lotta. And now let’s move on to the second quarter. The start for the second quarter was somewhat shaky due to planned tariffs and aggressive trade policy in The U. S, leading to a widespread market uncertainty. However, the sentiment rebounded swiftly after April and the markets stabilized.

Fee result grew by 26% year on year, reaching €18,500,000 reflecting mainly improved cost efficiency and an increase of 11% in client assets under management. Cost efficiency improved significantly with the cost to income ratio dropping by 11 percentage points to 53%. The result related to risk policies in the second quarter decreased to €2,000,000 Main reason for this was the high comparison figure that included a profit of €6,000,000 related to the insurance portfolio transfer to If during 2024. Profit before taxes fell to €34,200,000 during the second quarter, impacted mostly by the decline in net finance result. The net finance result decreased to €21,600,000 mainly driven by the decline in long term interest rates used in the discounting of insurance contract liabilities.

Also, the comparison figure was notably strong due to the sharp rise in the long term interest rates during the second quarter of last year. It is important to remember that fluctuations in the net financial results are part of the nature of Life and Pension Insurance business. Even if the volatility has decreased significantly in the recent years, thanks to interest rate hedging measures taken. Capital light profit before taxes was €20,600,000 in the quarter. The decrease from last year is primarily due to negative one off factors and adjusting for the €6,000,000 one off gain from the portfolio transfer to If.

We have actually grown our underlying capital light profit before taxes by some 8% quarter on quarter and 25% year to date. The Solvency II ratio adjusted for dividend accruals and without the transitional measures remained strong at 193%. Organic capital generation. One of the key factors driving our ability to pay dividends was especially strong. Capital was also released through the divestment of our Nnete Holding and other publicly listed shares, which means that Mandatum continues to be a very well capitalized company.

The steady growth of client assets under management continued to a new record high level, even though it was weighted down by a weaker U. S. Dollar, especially in retail funds and lower investment product sales in April. The increase in assets under management was largest among institutional wealth management business, 16% year over year, followed by the corporate business, 12%. The impact of weakened U.

Dollar was largest in retail assets under management that remained flat year over year. Net flow from the corporate clients increased significantly year to date, the growth coming mainly from personal funds. Sales to corporate clients remained strong. The unit linked pension business continued to grow steadily, while sales of both risk life insurance and personal funds remained at good level. Eight new personal funds were established during the quarter.

The strong corporate net flow shows also the diversification of our capital light business, highlighting the importance of corporate business to our growth story. Net flow from the Institutional Wealth Management business grew less than last year, mainly driven by the lower investment product sales in April. Sales of investment products declined in April due to an uncertain market environment, but picked up significantly during the May and June, increasing the net flow of the second quarter to €164,000,000 Overall, we have managed to keep the net flow positive even in turbulent market conditions. Client assets under management were increased by the positive net flow and a positive market movement of €240,000,000 The steady growth in our institutional wealth management business continued in the second quarter. In terms of assets under management, the largest growth came once again from international institutional clients, 40% and amounted to €1,700,000,000 New client accounts were established in, among others, France and Norway.

To further accelerate growth, especially in Continental Europe, we are establishing a new sales unit in Luxembourg, bringing us closer to a potential European customer base. The largest increase in assets under management was once again in credit and allocation products, followed closely by external products. Also, we launched a new European high yield total return fund. Our award winning credit products, such as the Nordic High Yield Fund, are good examples of leading industry expertise. Operational efficiency continued to improve significantly, with the cost to income ratio dropping by 11 percentage points to 53% over the trailing twelve months.

The improved operational leverage demonstrates that a determined focus on cost efficiency is paying off, supporting sustainable profitability. While fee margin decreased slightly to 1.14% due to growth in lower margin international institutional business and personal funds, stand alone product margin remained stable. Mandatum organized a Capital Markets Day early in June, during which we announced our new financial targets. Setting new targets was essential to reflect our ambition to grow in capital light business areas while also enhancing profitability. The updated financial targets for 2025 to 2028 are: return on equity above 20%, above 10% compound annual growth rate in capital light profit before taxes and solvency margin of 160% to 180% with cumulative shareholder payout exceeding €1,000,000,000 We want to develop an even more capital efficient and increasingly fee based company, while committed to being a good dividend payer also in the future.

Our vision is to be fastest growing Nordic asset and wealth manager with optimized growth in Finnish life and pension sectors, positioning us strongly for the future. Although our new targets are ambitious, I have every confidence that we will achieve them by 2028 through determined actions and the dedication of all Mandatum employees. And now let’s move over to Matti and figures.

Matt Ahokas, CFO, Mandatum: Thank you, Petri. Let’s take a closer look at the second quarter result components. As Petri mentioned, the fee result was up 26% year on year with assets under management up by 11%. And if we compare to Q1, our AUM was up by some 3%, but we still had quite a substantial negative of some €300,000,000 from the weaker U. S.

Dollar in the quarter. As we pointed out earlier, around onefour of our client AUM is denominated in U. S. Dollars, and this is especially big in the higher margin retail funds. Also, the weaker U.

S. Dollar had a negative P and L impact on the H1 fee result itself. Client fee margins were down a bit in the second quarter. We’re looking on a rolling twelve month basis, and this reflects the mix impact from the fast growing international institutional business. The costincome ratio of our client AUM continued to decrease according to plan and was 53% in the quarter.

Our net finance result was €22,000,000 And despite the very weak investment markets in April, especially our fixed income investments were at a good level in the second quarter. At the same time, the discounting impact in Q2 was significantly negative following the decline in the long IFRS discounting rates, and I’ll come back to this a bit more later on. Worth noting is that the Q2 net finance result also included a EUR 12,000,000 capital gain from the sale of our shares in Enento in June. Our result related to risk policies in Q2 was down compared to EUR 24,000,000. Note that the comparison figure in ’24 included some EUR 6,000,001 of income from the portfolio transferred to IF.

Also H1 has typically a seasonally higher cost in the risk insurance business mainly due to the accrual of the previous year’s reinsurance costs. Also, the CSM release in the quarter was lower, but this was only due to timing effects, not the CSM itself. Despite the turbulent markets, we consistently continue to generate capital. Organic capital generation was up to EUR 85,000,000 from EUR 58,000,000 in the last year. This translates to €0.17 per share altogether.

The main positive driver in the quarter was the faster AUM growth in the quarter. Return on equity was 7.6% in the quarter, mainly due to the lower net finance result. As you know, one of our financial targets is to grow our capital light profit before taxes by more than 10% annually by 2028 compared to 2024. And if we look at the 2025, the reported profit before tax was €41,000,000 basically in line with 2024 despite the very turbulent financial markets, the mentioned FX headwinds and lower sales in H1. Worth noting is that the comparison figure last year includes a €7,000,000 one off gain from the portfolio transfer of IF.

So adjusted for this, the growth was around 25%, as Petri mentioned. So if we then look closer at the group net finance result, it was down to EUR 22,000,000. And in the with profit segment, it was down to 9,000,000. However, the with profit investment return in the quarter at EUR 1,300,000.0 was above last year and broadly in line with a normalized quarterly run rate. Especially, our fixed income portfolio returns were good at 1.6% or over 6% annualized.

The fixed income mark to market yield was down to 4.3% due to lower rates and tightening spreads as well as some internal portfolio adjustments. This is still well above the cost of liabilities. Although equities contributed positively this quarter and we continued to decrease our equity exposure during the quarter, Our now the listed equity exposure was down to 4% of total assets at the end of Q2. And as you all know, this is in line with what we have communicated previously. We sold equities worth some €30,000,000 during the quarter.

Private credit actually had a fairly normal quarterly return, but then we had negative value change in our own real estate portfolio and also private equity returns were negative in the quarter. So these were both below normal. Although the swap rates actually were quite unchanged in the second quarter, the IFRS rates that we use for discounting in the long end of the yield curve actually decreased in the quarter. The change in the shape of the yield curve was quite unusual and had a €25,000,000 negative P and L impact in the quarter. This was mainly a result of a 20 to 30 basis point lower illiquidity premium in the long IFRS discount rates that we use.

The move actually was unusually large in Q2 and happened mainly in the twenty year plus maturity, where our hedging ratio is very low, as you can see from Page 19 in our investor presentation. The with profit portfolio interest rate hedging ratio increased further and was probably unusually high at 97% at the end of Q2. The reason for this was technical asset class mix change. The overall fixed income exposure increased mainly in the five- to ten year bucket, while the share of listed equities decreased, as I mentioned. As we show, although the average hedging ratio is high, there are big differences in the maturities.

The hedging ratio is very high in the short end but low in the very long end. And I’d like to also note that the IFRS discount rate mark to market changes have no impact on the actual contractual cash flows nor our dividend paying capacity. Despite the turbulent markets, we continue to consistently generate capital. Organic capital generation was up to €85,000,000 in Q2 or significantly higher than the reported IFRS result. This measure, as you know, takes into account also, for example, the own funds generation from income booked in the CSM as well as potential capital release from a lower solvency capital requirement.

As pointed out before, we think the OCG is a more relevant measure to assess our performance and capital generation. Our own funds generation increased the solvency margin by roughly nine percentage points in the quarter. To reflect our new financial targets, we now report our solvency margin also including the transitional measure. The group’s solvency margin increased by 10 percentage points quarter on quarter, but decreased by three percentage points when taking into account the larger dividend deduction assumption compared to last year. Last year, we had €0.33 and now we use €0.5 In addition to the announced sale of the Saxobanck share is expected to increase the solvency margin by around 35 percentage points.

Once the transaction is finalized, then, of course, this means that we will be significantly above the target range at the end of the year. Back to you, Lotte.

Lotte Burustrem, Investor Relations Lead, Mandatum: Thank you, Matti. And now let’s move on to the Q and A. Please dial in for any questions.

Conference Operator: The next question comes from Hans Retidol Christensen from Danske Bank Markets. Go ahead.

Hans Retidol Christensen, Analyst, Danske Bank Markets: Good morning and thanks for taking my question. So the first question I have is on the sort of fee margin and net flow. And so thank you for the Slide 14, where you’ve started reporting the cost income and fee margins. You say on the slide that you have strong growth in international client business, which is affecting the mix. And so what I was really wondering is, are you able to quantify how much of the SEK 160,000,000 in net flows this quarter is coming from the international business in Institutional and Wealth Management versus how much is, if I can sort of say, local, I guess?

Petri Nemisfirtat, CEO, Mandatum: Okay. Yes. So the number what we are getting from what is the portion of international sales, it’s quite substantial during this quarter. Lotte remind me, do you have an exact number? No, we don’t publish that exact number.

But I would say it’s the fastest growing as you have seen the numbers 40% growth year on year. So it’s quite substantial amount what we are getting. Another growing body, it’s really fast growing is our private wealth management in Finland, which is growing more or less the same speed. But it’s a very big part of our sales nowadays.

Hans Retidol Christensen, Analyst, Danske Bank Markets: Okay. Thank you very much. And then I guess my second question is a bit more technical in nature. But on the transitional measure that you’re starting to report on this quarter, I was wondering how to kind of think about the unwinding of this measure and especially up against your target of 160% to 180% on solvency over the next four years. So if your solvency was at sort of 193% with that measure at the end of last year, I guess that would imply that it was SEK 170,000,000 at Q4 and then it’s SEK 155,000,000 this quarter.

So am I thinking correctly that it’s down sort of SEK 14,000,000 for half year and that would imply sort of an unwinding of EUR 30,000,000 each year. I guess my question is, is that the right way to think about it up against your total goal? Or am I completely off here?

Matt Ahokas, CFO, Mandatum: No, I think that’s the right way to think about it. But remember the €193,000,000 is an all in figure. So of course, technically that’s the figure we look at. So that’s there is no unwinding there at all. But of course, in the actual figure that we report, then that will be lower and gradually unwinding until 2028.

So but that’s exactly the reason why we look at the 193,000,000 is the all in figure, and there is no unwinding effect on that at all. And as you know, our new financial target is exactly for that reason that otherwise, the ratio would technically decrease every year simply because of the lower impact of the transitional measures. So 1.93% is comparable to the 1.6%, 1.8%, and there is no kind of unwinding or transition figure impacting that at all. And just to remind you that, obviously, once the Transaxo Bank transaction is finalized, the ratio will jump quite significantly, as I mentioned.

Conference Operator: The next question comes from Antti Sari from OP Markets. Please go ahead.

Antti Sari, Analyst, OP Markets: Hello, and thanks for taking my question. From an international growth perspective, I would like to ask whether you can mention us any blockbuster products? Or are there any like few products evaluating the sales and in a way causing this lower margin level?

Petri Nemisfirtat, CEO, Mandatum: Yes. Thank you, Antti. So we have stated already before that our fee margin will go down once we our fastest growing part is our Wealth Management Institutional Wealth Management division. And traditionally, that business is lower margin than what we have in our retail and corporate, which are not growing that fast than our wealth management division. So it’s not specifically international.

It’s all institutional business both in Finland and outside of Finland, which are, let’s say, lower margin business. But still we are in asset classes that we have a quite decent and quite high fee levels altogether. So what we are selling internationally is our Nordic high yield fund, which is not very low margin. But of course, it’s not 1.2% or over 1%. And what we are also selling is in your secured loan fund, European high yield fund.

And a little bit also we started to see some growth in our managed futures fund, which is a hedge fund, which is high margin product. So but it’s about wealth management division or fee level is around 0.8. So that’s something which is more we sell that. Of course, the combined number will go down.

Antti Sari, Analyst, OP Markets: Okay. I see. So the reason for lower margin is client mix, not product mix?

Petri Nemisfirtat, CEO, Mandatum: It’s the client mix. Yes. Yes, that’s true. So more we sell to institutions. So it’s not really Telokor.

We traditionally though in those areas, have a higher margins. And I guess most of our competitors have the same things happening for them as well once they’re selling different customer segments.

Antti Sari, Analyst, OP Markets: I see. Then more technical question. Looking at WitProfit business, the other result was now negative for second quarter in a row. So what should we expect about this? And is this sort of a new normal?

Matt Ahokas, CFO, Mandatum: Hi, Antti. It’s Matti here. No, it’s a good question. And here again, there we had some actually portfolio transfers related to kind of IT system renewals. So no, it’s not the new normal.

And of course, when you have a couple of quarters where you see negative figures, it’s kind of annoying, but the figures should be pretty close to zero going forward. So in our line of business with a very long tail of liabilities and 100,000 of customers and different client segments and cohorts, what we call, there’s always these kind of some movements here. But actually, this quarter, it was mainly caused by a technical move from actual corporate to with profit other. Some of the portfolios that have both with profit and unit linked capabilities. It’s not a big figure, so but I think the figure should be pretty close to zero going forward.

Antti Sari, Analyst, OP Markets: Okay. Thanks. And then one more question. You mentioned this distribution agreement with Pohiente Active. Could you remind us whether you have other distributors

And do you expect this deal to have meaningful impact to your sales?

Petri Nemisfirtat, CEO, Mandatum: Yes. So we have two distributor in Finland. So it’s Danske Bank, of course, is our main partner in Finland selling both risk insurance, which is called loan insurance. It’s creditors protection loan product and of course, endowment of the capital redemptions, so savings products as well. Borje and that is only concentrating to risk policies to private people and micro companies, so very small companies.

So and is it meaningful? We hope so. And we believe that otherwise we wouldn’t have done that. But of course in our figures, if you look at the risk premium numbers, of course, are not that big. But it’s a meaningful partner and they have a very substantial distribution and close to 200 salespeople all around to Finland.

So we are waiting good results for and this is a good add on to our risk sales for Retail segment.

Antti Sari, Analyst, OP Markets: That’s clear. Okay. This is all from my side. Thanks.

Conference Operator: The next question comes from Casper from Melas. Please go ahead.

Hans Retidol Christensen, Analyst, Danske Bank Markets: Hi. This is Casper from Inderes. Thanks for having my question. How many persons do you plan to recruit to boost your international sales in Luxembourg? And are these additional costs included in your guided 1% annual cost growth going forward?

Petri Nemisfirtat, CEO, Mandatum: Yeah. It’s of course, it’s additional cost even though one person from Finland will move there to and do his job from there, which he’s currently doing from here, So heading to international business. It’s of course, it’s extra cost. But it of course, we will believe that it’s the investment not just the cost to our enhance our business. And let’s say we are targeting few people at this point, so not a huge amount of people.

A little bit the same what we have done in Sweden. So handpicked people, which can really deliver results in a short period of time. So meaning few people, couple of people at this point like in Sweden what we have done.

Matt Ahokas, CFO, Mandatum: And Kasper, yes, it is included in the cost guidance.

Hans Retidol Christensen, Analyst, Danske Bank Markets: Okay. Thank you very much.

Conference Operator: The next question comes from Giaco from Tervainen. Please go ahead.

Jakob, Analyst, SEB: Morning. Jocko here from SEB. You’re noting some new mandates in in Norway and and France. Could you elaborate a bit how is the pipeline looking in these new markets if you compare the situation a year or two ago, I. E, what is going to be your activity level internationally versus a few years back?

Petri Nemisfirtat, CEO, Mandatum: Yes. Thank you, Jakob. It’s far better than it was two years ago. Of course, we have more salespeople and sales forces also. And we have more people to cover those markets.

We just rectated last year one new wealth manager salesperson to Stockholm, and he has really put a lot of effort to Norway. And he has a lot of connections there and started to get some money in as well. So it’s a good process and pipeline is of course very promising. At the same time, it’s not just activity or more people. It’s also that we have award winning products, Nordic High Yield.

All our credit products are really performing well. They are top products in surveys and so on. So we are in a good position in certain way that we have a lot of questions in various places because they have recognized our performance, our products, and they want to look at more carefully, meet our teams and so on. So for example, this France case came actively from the customer side. So and now we see that there’s a lot of demand in certain way

And that’s why we also made a decision to put more efforts than the resources and make investments to Luxembourg because it’s a lot of ground to our products. Totally different and much better situation than two years ago.

Jakob, Analyst, SEB: Excellent. That’s helpful. Thanks. Then on the fee margin and the weaker USD, obviously the USD like Matteo mentioned it impacts on the absolute numbers in euro terms. But does it have impact on the reported blended fee margin as well?

Matt Ahokas, CFO, Mandatum: Yeah. Hi, Jakob. A very small impact. So this is mainly a kind of product mix and client mix impact as said. And then there is some also variation of course if you look at back in 2024 especially in the institutional and wealth management business, alternatives played a much bigger role than today for obvious reasons.

The private equity and real estate market has been slow. So that, of course, is impacting as well. But the main impact is actually coming from the product mix, a mix impact here together. And there is some quarterly variation. We have a lot of products that we sell, and the margins may vary a bit every now and then.

So I guess the fall in the second quarter was a bit bigger than expected. So small impact from the U. S. Dollar, but not, of course, at all as big as to the reported figures.

Petri Nemisfirtat, CEO, Mandatum: Yes. If I may add, because I already answered to Antti about this issue, it’s product, but it’s also customers. Because those customers we are selling, are buying those products, which are selling very well. So I don’t know which one is first, chicken or egg. But it’s that’s the case.

So we are selling professional buyers, institutions, credit product, which of course is affecting the total combined fee margin. But all in all, what I haven’t said yet, we haven’t seen any softening or tightening in inside of the customer segments or product range. So it’s more or less the same than what we have seen in last quarter or a year ago.

Jakob, Analyst, SEB: Good. Thanks. Then finally, on my kind of a technical question, one regarding the dividend accrual, which was now raised. Why was it raised? Did I miss something during the quarter?

What is the reason behind that?

Matt Ahokas, CFO, Mandatum: Well, if you look at what we said at this Capital Market Day, we said above €1,000,000,000 of dividends. And if you kind of take that as a figure and divide that by four, it would imply €0.50 per share. This is not the guidance in any way of the dividend. It’s a kind of technical adjustment we use. And since we said the €1,000,000,000 or above €1,000,000,000 actually we use now that it would be distributed evenly.

However, as you remember, like we said at the Capital Market Day, we believe it’s probably going to be de facto a bit more front loaded. Obviously, entirely up to the Board to decide what they think about it. But of course, for obvious reasons, the Saxo Bank transaction finalization, the Enento shares means that we have ample liquidity here, but we use €0.50 per share as the assumption for the accrual. This was €0.33 as you know last year.

Jakob, Analyst, SEB: Okay, okay. I thought it would just be more technical based on the last year. Last year, $0.03 3 plus, EUR $0.03 3. Okay. But fair enough.

Very well. Understand. The

Conference Operator: next question comes from Emil Imonen from DNB Carnegie.

Emil Imonen, Analyst, DNB Carnegie: Hi, thanks for taking my questions. Just a couple more. Maybe first starting on the cost to income ratio development. I was wondering, with lower fees in the international business, but maybe that being a little bit smaller right now, but growing very strongly. Is there any scale benefits you can realize here so that actually our costincome could prove even though fee margins are a little bit lower?

Matt Ahokas, CFO, Mandatum: Hi, Emil, It’s Matti here. Absolutely. And as you remember, if you then take our cost guidance of 1%, which is including the investments, that means that if we grow our income by more than 1%, the costincome ratio will improve. It will not improve, obviously, forever, most likely. But I think we still see potential for improvement.

And of course, one big driver is, like we mentioned, that a lot of the significant IT investments have not been amortized and have been taken. And that, of course, means that the cost growth will be fairly limited going forward. And if the income growth is bigger than the cost growth, the cost to income ratio will improve.

Emil Imonen, Analyst, DNB Carnegie: That’s clear. Thank you. And then on the net financial result in wheat profit, that seems where the maybe miss came to estimates. I wonder, could you go into a little bit more detail on how we maybe should think about the net finance result if interest rates continue to go down and how it compares, for example, to the average policy rate?

Matt Ahokas, CFO, Mandatum: Yes. I guess, of course, this is one bit of a surprise because obviously, externally you can observe the swap rates, which have an impact on our asset side, but then the discount IFRS discount rate, which we use is a combination of both the swap rate and an illiquidity premium for BBB plus euro denominated bonds, which we actually get from Moody’s. So it’s not our own invention, and that move was quite significant and as said in the portfolio or in the maturities above twenty and twenty five years, where, for obvious reasons, we have hardly any hedge there for and it’s part of our strategy. So the interest rate moves, obviously, you should not kind of take, especially when it comes to anything below ten years, we are very well hedged for that. But of course, when if there’s movements in the very long end, that will have an impact like was the case here in the quarter altogether.

And if we look then overall, as you mentioned on the kind of policyholder funds and policyholder development, first of all, are if the mark to market yield on the fixed income portfolio comes down. Now, of course, if we would use the if the unwinding rate would be the current rate, it would be also fifty percent fifty basis points roughly lower. So for us, it’s not the actual level of rates, it’s also it’s the spread we make on the policyholder liabilities. And as said, that is roughly the 2% that we’ve indicated even now. So for us, the level of interest rate is not relevant, excluding the fact that if it happens in the very long end of the yield curve and especially these illiquidity premiums, that will have an impact.

But I actually had a look. And for example, these moves, we haven’t seen for a number of years, which happened now in the second quarter. So I would like to characterize them as quite unusual. And in the level of the interest rate in the below ten years maturities will have very limited impact on our figures.

Emil Imonen, Analyst, DNB Carnegie: Okay. Thank you. That clarifies it a lot. That’s all from me.

Conference Operator: There are no more questions at this time, so I hand the conference back to the speakers.

Lotte Burustrem, Investor Relations Lead, Mandatum: So that was all for today. Thank you for joining us, and please don’t hesitate to contact us at Investor Relations should you have any further questions. Goodbye.

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