Intel surges more than 8% after chipmaker’s profits top expectations
Nordnet AB reported its third-quarter earnings for 2025, revealing a 7% increase in revenue year-on-year, alongside a 6% profit growth to over SEK 900 million. Despite these positive figures, the company’s stock fell 4.45% in pre-market trading, reflecting investor concerns over rising operating expenses and market dynamics. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.89, with particularly strong marks in profitability and relative value. The earnings call highlighted strong customer growth and strategic advancements, yet the market’s reaction indicates mixed sentiment.
Key Takeaways
- Revenue increased by 7% year-on-year, with profit growth of 6%.
- Operating expenses rose by 30%, excluding Germany, this increase was 9%.
- Strong customer and savings capital growth, with trades up 22%.
- Stock price dropped 4.45% in pre-market trading.
Company Performance
Nordnet demonstrated robust growth in the third quarter, continuing its upward trajectory in revenue and profits. The company reported a significant 13% increase in customer numbers over the past year, and savings capital grew by 16%. With a healthy gross profit margin of 67% and return on equity of 11%, the company’s operational efficiency remains strong. Notably, the number of trades executed rose by 22%, underscoring the company’s strong market position in equity trading. However, the substantial rise in operating expenses, particularly related to its expansion efforts in Germany, raised concerns among investors. For deeper insights into Nordnet’s financial metrics and growth potential, InvestingPro subscribers have access to over 30 additional key performance indicators.
Financial Highlights
- Revenue: Up 7% year-on-year
- Profit: Increased by 6% to over SEK 900 million
- Operating expenses: Up 30% overall, 9% excluding Germany
- Customer growth: 13% increase year-on-year
- Savings capital: Growth of 16% year-on-year
- Trades: Increased by 22% year-on-year
Market Reaction
Despite positive earnings growth, Nordnet’s stock fell by 4.45% in pre-market trading, dropping to 274.8 from the previous close of 287.6. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading below its intrinsic value, suggesting potential upside opportunity. This decline reflects investor apprehensions about rising costs and the company’s ambitious expansion plans. The stock’s movement contrasts with its 52-week high of 290.2, indicating potential volatility in investor sentiment. Two analysts have recently revised their earnings estimates upward for the upcoming period, signaling confidence in the company’s growth trajectory.
Outlook & Guidance
Looking forward, Nordnet remains focused on expanding into the German market by the second half of next year. The company plans to enhance its private banking offerings across Denmark, Finland, and Norway. With an Altman Z-Score of 5.07 indicating strong financial stability, and a current ratio of 1.12 suggesting adequate liquidity, Nordnet appears well-positioned for its expansion plans. Despite the increased expenses, Nordnet aims to maintain cost control while exploring growth opportunities in private markets and cryptocurrency offerings. Get comprehensive analysis of Nordnet’s expansion strategy and financial outlook through the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
Executive Commentary
CEO Lars-Åke Norling emphasized the company’s growth trajectory, stating, "We’ve grown the revenue with 25% per year since 2019. Cost has only been growing around 7%." He also highlighted Nordnet’s competitive advantage, saying, "We are confident in our offering with a broad offering, the one-stop shop, the really good customer experience."
Risks and Challenges
- Rising Operating Expenses: The significant increase in costs, especially related to the German market entry, could impact profitability.
- Market Competition: Potential challenges from U.S. online brokers entering the Nordic market.
- Economic Uncertainty: Broader macroeconomic pressures could affect customer investment behavior and market volatility.
By focusing on strategic growth and maintaining a competitive edge, Nordnet aims to navigate these challenges while capitalizing on its strong market position in the Nordic region.
Full transcript - Nordnet AB (SAVE) Q3 2025:
Marcus Lindbergh, Head of Investor Relations, Nordnet: Good morning and welcome to the presentation of Nordnet’s third quarter for 2025. My name is Marcus Lindbergh, and I’m the Head of Investor Relations at Nordnet. With me today, I have our CEO, Lars-Åke Norling, and our CFO, Lennart Krän. Lars-Åke and Lennart will start off by presenting the results, and then we will have a Q&A session. During the presentation, all participants will be on mute. When we come to the Q&A session, you have two alternatives to ask questions. You can either click the raised hand button in Zoom, I’ll then unmute you and call your name, or you can submit a question in writing. The presentation itself is available on our corporate website, nordnetab.com. Okay, let’s start the presentation. Lars-Åke, please go ahead.
Lars-Åke Norling, CEO, Nordnet: Thank you, Marcus. I can go to the next slide. Some highlights for the third quarter: stable financial performance with continued growth in our core business in line with our strong quarter two. We see positive net savings and also very good customer growth. Overall, strong trading activity with record cross-border trading, both from a growing customer base and also positive market sentiment, not least outside of the Nordics in Europe and the U.S. We see a decline in net interest income due to low interest rates and also that we sold our secured lending portfolio last year, partly compensated by a growth in deposits. Looking at the cost, we estimate the cost growth to be in line with guidance for the full year.
As you noticed, we also have a negative impact of SEK 8 million from an error in handling corporate action related to a share called Wolfspeed that had a reverse split with very poor external information around that reverse split. The Nordnet app received the Red Dot Design Award and also continued a strong focus on new product launches. We just launched a new currency account for ISK, or Endowment Wrapper, in Norway. Go to the next. Looking at the financial KPIs, you see strong development, very strong customer growth, 13% up in one year. Also, very strong savings capital growth with 16% in one year, both from underlying market growth and also very strong net savings. The number of trades is also good. It’s up 22% year-on-year from a growing customer base and also overall a positive market sentiment. Revenues are up 7%.
We see then a decline in net interest income from falling interest rates, but a very strong growth in our trading business and also good growth in our fund business. Looking at the operating expenses, it’s up 30% year-on-year, but excluding Germany, it’s around 9% cost growth year-on-year. Continued operating leverage in the business with profit growth of 6% to over SEK 900 million in the quarter. Looking at the customer growth and net savings, we’ve had a very good quarter with strong customer growth, clearly up from quarter two. So far, almost 200,000 new customers joined Nordnet in 2023. Also, very good net savings. We had a dip in May, June.
There was a lot of excess capital on the accounts or deposits on the accounts, but now we see a clear pickup and strong net savings in the quarter and SEK 60 billion in net savings so far this year. We also benefit, continue to benefit from being diversified in the Nordics. That manages market risk but also enables growth. We see good customer growth and savings capital growth across the board. We passed 500,000 customers in Sweden during the quarter, also 500,000 customers in Norway, and we passed 600,000 customers in Denmark. Go to the next. Looking a little bit on the different revenue streams, starting with brokerage. To the left there, you see the blue line, a clear pickup in number of trading customers from a growing customer base, but also that overall positive market sentiment.
Looking at trades for trading customers, it’s stable, but looking at the graph down to the right, the cross-border trading is really picking up. It’s close to 40% in the quarter, both from the country mix where we have more customers outside of Sweden, where they naturally trade more cross-border because the local markets in Finland and Denmark are fairly small, so they trade lots cross-border. Also coupled with positive market sentiment, not least in the U.S., but also several European markets have done well during the year. Looking at trades per day, we see a clear pickup from 2019, from more than a doubling on the customer base. We also see a pickup of trade per customer this year from high volatility in quarter two from tariffs, but also good trading this quarter from positive market sentiment in quarter three.
We also see a clear uptake in income per trade, and that’s due to a higher share of cross-border trading. Looking a little bit on our fund business, we see that the fund revenue margin and also the fund flows and the fund capital as such has recovered from a dip in quarter two when we had the tariff volatility. We see overall a steady growth over time in the fund capital. Over one quarter of the fund capital is Nordnet branded funds, and flow-wise is around 30% of the flow. We see also a steady pickup of the number of customers owning funds, which is now more than 50%. It’s a nicely developing business for us.
Looking a little bit on net interest income, we see that the deposit declined a little bit this quarter from very strong net buy in equities and funds, SEK 21 billion in the quarter, in spite of very high net savings of SEK 18 billion. Of course, that the customers net buy funds and equities is good for our core business over time. Go to the next. Looking at the different components of net interest income, we give those snapshots, and they’re fairly similar to last quarter. Liquidity portfolio snapshot $1.6 billion for 2025. Main sensitivity here is deposit volume, and we see a likely upside on the deposit volume over time from a growing customer base and strong net savings. In this quarter, the deposit level was a little bit down due to the very strong net buy, but also higher lending volume.
Looking at the forward-looking market trades, they’re a little bit higher, actually, than compared to last quarter. Looking at the loan portfolio snapshots, $1.1 billion for 2025, same also as last quarter. Main sensitivity here is margin lending volume, which we expect to increase, increase savings capital and also more customers. That’s exactly also what we see in this quarter with a quite big pickup in the margin lending volume. Margin lending is good. It drives the business, both the lending base, but also then our customers use that for investing in funds and equity. Overall, a very low-risk lending portfolio with loan-to-value on low levels, both for margin lending and mortgage, and no credit losses. We also manage to maintain the margin on the margin lending on a fairly okay level in spite of lower central bank rates. Looking then at the deposit interest, it’s around $400 million.
That snapshot for 2025 was about the same as last quarter. The sensitivity here is volume or deposits on the savings account, which we expect to go down with lower rates. That’s also what we see in quarter three versus quarter two. In summary, resilient revenues and also boosted by diversified revenue streams. We have good development in all our revenue streams, both net interest income, the fund business, and the brokerage business. Looking at the margins, of course, the NII, net interest income margin, is a little bit down from low rates. We see trading margin is up from high share cross-border trading, and fund margin is fairly stable, a little bit down due to the mix between passive and active funds, where we see a little bit picked up in the passive funds again. Overall, the business model is very good, operating leverage.
We’ve grown the revenue with 25% per year since 2019. Cost has only been growing around 7%. Most of the top line ends up on the bottom line, which is a true position of profitable growth. We also continue with a high speed on releasing new features and products. We’re very happy that we received the Red Dot Award for our app this summer. We also continue to launch features for our more active customers. The latest now is annualized estimates on the instrument pages, where you can both customize those, but also both historic and forward-looking data. You also implemented, you can see in real time the transfer status when you transfer equity or funds from another bank. We launched Spain as a new trading venue. We continue with a lot of different launches or feature improvements in Cherville.
We see here a steady pickup of signups in Cherville, but also posts in Cherville. It’s becoming more and more of a popular forum. We also continue to launch new exciting features in our partner web for our partner business, partner customers. With that, Lennart, I hand over to you.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thank you very much. With a good customer inflow and very good net savings during this quarter, we still can conclude that the capital situation, as well as the liquidity situation, is very good, which creates a lot of flexibility. We have a liquidity situation regarding liquidity to deposits of 72%, which is great. We also have a leverage ratio of 5.4%, which is a good levy from the regulations. We also received a lower capital requirement on the risk-weighted side from the Swedish Financial Supervisory Authority during the SREP. They were decreased by almost 1% from 289 to 194. This, however, didn’t affect our capital requirement as such because it is the highest of the internal calculated and the SREP. That is the meaning for us. Still, it’s also that the leverage ratio is constrained, not the risk-weighted.
In conclusion, very good capital and liquidity situation, which also means that we intend to continue our share buyback program going forward when this ongoing is going out. I think that’s what I can conclude on the capital and liquidity.
Lars-Åke Norling, CEO, Nordnet: Okay, thank you, Lennart. A little bit on the strategic focus. As you know, we have four key strategic ambitions. Of course, starting with the customers, having the most satisfied customers, building this one-stop shop for savings investment, coupled with a really great customer experience and overall competitive price. We also know to have happy customers, you need to have really talented and passionate staff, which we have, and a strong EMPS, and overall how we can attract and retain talent. At the bottom, there is sustainable business. We are in a trust business. We need to earn that trust every day. It’s important that we have a very strong compliance and risk management and that we overall are a liked and trusted brand.
The last area is profitable growth to really secure that we continue to take market share in a growing savings market in the Nordics, but also open Germany as a new big opportunity in H2 next year. Also, secure that we continue with good cost control and show that we have a really scalable business model. We’ve had really long-term, nice, strong growth in both customers and savings capital. We have critical mass of customers in all countries. We have happy customers in all countries, and that’s driving word-of-mouth growth. Customer savings capital growth is the main driver for revenue growth for us. New customers coming in, liking what they see, transfer money from other banks, and start using our products. We take a market share in a growing savings market in the Nordics, but we still have plenty of room to grow.
We have 8% of the Nordic population on our platform. We have 7% of the addressable market, which is a big market, SEK 18 trillion, and it’s a growing market. It grows over time. We also take a market share in this market up from 3% in 2016 to 7% now in 2024. Looking to the right, we see we have highest market share in equity trading, a little bit lower in funds and pension, and that’s two clear growth areas for us where we put a lot of focus. Also, looking at the cost picture, we have very good cost control and a very scalable business model. We had 900,000 customers in 2019. Now we’re at 2.3 million customers. In spite of that, the cost growth has been limited. It’s also made room for us to invest in growth. We have a few clear investment areas.
One is more tech staff to increase development speed. The other one is higher marketing costs to drive brand awareness. The third one is launch in Germany. The fourth is what we’ve done with the new fund company and also pension branches in Finland and Denmark. Looking at the underlying cost growth, it’s actually fairly small, around 3%. We decided to invest in select growth areas. Looking at the actual versus financial targets, we’re basically in line on cost growth, capital per customer, income margin, and also expenses. We’re trending according to targets. Finally, the key priorities for 2025 are, of course, all the work around the launch of Nordic Germany in H2 next year. We have good progress. We are recruiting the team in Germany now, and a few people are already in place. We’re finalizing now the go-to-market offering.
We’re also doing all the development that’s needed on the platform for the launch. The passporting of the license, the bank license, is also going well where the SFSA in Sweden has now handed it over to BaFin in Germany. Of course, we continue strong focus on our fund and pension business. We have a lot of room to grow and not least realize the full potential in the Livrente Danish pension product that we launched in quarter four. We see a clear pickup in net savings and pensions in Denmark since launch. We’re 50% up in net savings and pensions in Denmark since we launched the Livrente.
We also continue to enhance our high-end offering for private banking and more active customers, where we now plan to launch also the new private banking offering that we launched in Sweden this summer, in Denmark, Finland, and Norway this quarter. We continue to roll out the brand campaign and do brand bursts. One is ongoing right now, and we’re going to continue that into next year to build awareness around the Nordnet brand. We continue to maintain focus on cost control to ensure underlying scalability, and also decide specifically where we’re going to invest for future growth. With that, I hand over to you, Marcus, for Q&A.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Great. Thank you, Lars-Åke and Lennart. Now we’ll open up for questions. Like I said before, if you want to ask a question, click the raised hand button. I’ll announce you by name and unmute you, or you can submit a question in writing. The first question comes from Patrik Platelius at ABG. Please go ahead.
Lars-Åke Norling, CEO, Nordnet: Perfect. Do you hear me?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yep. Yes.
Lars-Åke Norling, CEO, Nordnet: It’s always a gamble with this Zoom call. Perfect. Thank you. Yeah, you had a new slide on cost there, and we see the operating leverage in relation to savings capital is reducing. Can you talk a little bit about what you believe are your medium targets ambitions here in terms of this ratio? Yeah. We don’t guide specifically on that ratio, but it’s gone down from high levels down to 15 bps. What we guide on is absolute cost growth, which I think makes more sense because savings capital, as you know, can go a little bit up and down depending on the markets. Yeah, yeah.
Marcus Lindbergh, Head of Investor Relations, Nordnet: I understand that, and I know your targets, but I’m thinking that you at least look at peers and you have an ambition that this is a level that we want to reach, or how do you think about that?
Lars-Åke Norling, CEO, Nordnet: Yeah, but I think it’s room for improving that over time because now we’ve done quite big investments also in Germany and marketing, etc. With the strong net savings we have today and the growth in savings capital, there should be room for a little bit lower. Like I said, we don’t guide on that. We guide on absolute cost growth.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thank you. If we dig into the numbers here, it looks like a step up in the number of new customers in Sweden in the third quarter. Is this driven by the marketing efforts that we have seen here around Sweden and in media? Are you seeing that you started to take a meaningful market share in terms of new customers, or am I reading too much into this quarterly step up in new customers?
Lars-Åke Norling, CEO, Nordnet: It’s a combination of both from increasing brand awareness, I think, but also that we had a specific campaign in Sweden during September to celebrate that we had the five stars from Morningstar for all our Nordnet One funds. It’s partly due to that as well. Let’s see how that plays out over time. Of course, with the improvement of awareness over time, that should also spill over in, it’s like a higher customer growth.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Okay, fair enough. Thank you. My last question is regarding your capitalization. You are very well capitalized, and you continue to have a big buffer compared to your regulatory requirement. You have an ongoing buyback program. Do you see that there is room to increase either the size of this buyback program or pick up the pace in the buyback program or potentially increase your payout ratio as the buffer keeps being quite significant towards your regulatory requirement? How do you think about this?
Lars-Åke Norling, CEO, Nordnet: You want to take that, Lennart?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Absolutely. We have a long-term plan, and as you’re all aware, we have an AT1 bond that will have its first call in November next year of SEK 600 million. We also look upon how the deposit develops because that is actually what makes the requirement for the capital. Yes, we do always consider how much should we go on or should we just continue with the present pace of the buyback program. The AT1 should also be included because we could either choose to issue a new one or not, or we can continue or we can increase. This is what we evaluate all the time when we’re going forward to be flexible for increases in the deposit firsthand.
Lars-Åke Norling, CEO, Nordnet: Okay, so the takeaway from this is that you’re satisfied with the current run rate?
Marcus Lindbergh, Head of Investor Relations, Nordnet: We’re satisfied at the current run rate at the time being, but we also do evaluate if something happens or not happens as we plan to. We expect the ranges of the leverage ratio to be about 4 to 4.5%, and we’re now at 5.4%. We see at the end of next year, this will be a decrease of the leverage ratio. If it’s far above those measures, then we might evaluate even further.
Lars-Åke Norling, CEO, Nordnet: We also want to see that we discussed before a more continuous program, so we don’t spend all the money in one year and there’s no buyback the years after. We would like to have a program that runs for several years.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thank you so much. That was all for me. Great. Thank you, Patrik. Next question comes from Edmund Kierik at DNB Carnegie.
Lars-Åke Norling, CEO, Nordnet: Good morning. Do you hear me?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah.
Lars-Åke Norling, CEO, Nordnet: Excellent. Thank you. Maybe if we just start on the deposit development, could you talk anything more about what gives you confidence that that one should increase? I think you’ve been talking about upside there for a while, and we’ve had different factors bringing it down. What gives you confidence now that this isn’t the new normal, that it should actually grow from here?
Marcus Lindbergh, Head of Investor Relations, Nordnet: No, but I think deposit volume is clearly up this year, and I think, correct me if I’m wrong, Marcus, but around 16%. It was a little bit down this quarter due to high net buy, but over time, we see and expect deposit volumes to grow in absolute terms with a growing customer base and high net savings. How it will develop versus savings capital is a bit more difficult to predict, but I think in absolute terms, we foresee that the deposit volume is going to increase over time with a growing customer base.
Lars-Åke Norling, CEO, Nordnet: Great. On the NAI, thank you for the kind of static guidance you gave us for 2025. If you were to extrapolate it to 2026, given that we’re now approaching the end of the year, do you think consensus looks kind of reasonable, given that you also would probably expect some volume growth, I suppose?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, I mean, I think it’s reasonable. I think we’re going to have a little bit higher deposit volumes, lending volumes, and with the interest rates passed we see now in this presentation, then it’s reasonable. Of course, if everything is static, there’s no deposit volume growth or no lending growth with those rates, it’s going to be slightly down next year. We see that, of course, we’re likely going to have some deposit volume growth and lending growth.
Lars-Åke Norling, CEO, Nordnet: Excellent. Thank you. Maybe I can combine two questions in the last. If you could speak a little bit more about the kind of ambition to realize the potential in Livrente that you mentioned, and that you’ve seen a pickup in net flows in Denmark in the pension side, and if that ties into marketing a little bit to Patrick’s question before. If you could talk a bit more broadly from the marketing efforts you’ve done now a year later, what can you see in the overall brand recognition, brand awareness? Yeah.
Marcus Lindbergh, Head of Investor Relations, Nordnet: To start with Livrente, I think we have a good start. We’re up 50% on net savings and pension in Denmark this year from SEK 2.6 billion last year to SEK 4 billion this year. It’s a combination of both Livrente and the old product, Rate Pension, because you move everything you have at the same time. Previously, if you had both Livrente and Rate Pension, it was difficult to move because we could only accept Rate Pension, and it made it difficult to move the Livrente. I think it’s a very strong product for us. Of course, we will look at how to develop that over time as well. We’re very happy with the start, and it’s been positively received. Looking at the marketing effort per se, we see an increase in brand awareness, not least in Sweden, and especially also in the more active segment.
The investor segment is even more pronounced, which we’re happy about. Over time, it’s important to spend overall in increased customer growth, and that’s something we track also carefully. I think the campaign is off to a good start in all countries so far.
Lars-Åke Norling, CEO, Nordnet: Is it possible to have any quantifiable kind of effect on the brand awareness? Just get a sense?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, we have the numbers, but it’s an increase. Hopefully, that will also continue over time. You know, we do three or four brand bursts, bigger brand bursts per year, and after each brand burst, we see a positive traction on the brand awareness. Hopefully, this can develop over time. It also takes time to change awareness, to be clear on that. We see a clear, significant anyway increase in the brand awareness, not least in the investor segment.
Lars-Åke Norling, CEO, Nordnet: Superb. Thank you very much.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thanks. Thank you, Emmyn. Next question comes from Jakob Hestlevik at SEB. Please go ahead.
Good morning, everyone. You have talked about the relationship between deposit growth and trading activity. When clients sell off, deposit increases and vice versa. Do you expect trading activity to not pick up and margin lending not to grow, given your earlier remarks around deposit growth?
Yeah, I mean, we know if it’s a very big market crash, of course, deposit is growing. We also know that the customers are in a positive market, it’s net buying. What I’m saying is that with the growing customer base and high net savings, even though the customers are net buying, we expect to see growth in absolute volumes of deposits. That’s what we’ve done this year with 16% up. How it develops versus savings capital, that’s a bit more difficult to predict. In absolute terms, it should grow with a growing customer base and high net savings, which we’ve also seen this year in spite of strong net buys.
Yeah, the market has been sluggish across the Nordics. I mean, Denmark is down quite a bit.
Yeah, in the Nordics, but our customers are, I mean, buying a lot in Europe and the U.S. right now. It’s still a positive market sentiment, I would say.
That’s fair enough. Could you also remind us of the outcome from the IT platform issue you had earlier this year when clients could log into other clients’ accounts? On that theme, is the administrative error now in Q3 related to IT or a human error?
There’s no relation between those two. I mean, the incident at Wolfspeed was a corporate action event. As you know, they are complex and manual in their nature and increase likelihood for error. That said, we have very few errors in corporate actions historically, but this one’s a bit special since it was a two-step thing. Wolfspeed came out of Chapter 11 and needed a new American ISIN. That was one part. The other part was the reverse split. The information, especially on the reverse split, was pretty poor. We missed that one. We were not the only one. There were other international brokers that also missed it. Customers ended up with too many shares and some sold them. We need to buy those back and thereby buy the cost. It’s not IT. It’s just handling of a little bit poor information that we got too late.
That was a Wolfspeed incident. On the incident earlier this year, that was, as you know, a tech incident with a third-party library that we had problems with. We closed that in a short time. Stability on the platform has been high this year, 99.9%. Also 99% for the previous years. Overall, a very strong availability. Versus regulatory units or bodies, EME has decided not to do any investigation. We haven’t heard anything from the SFSA.
Okay, thank you very much.
Thank you.
Lars-Åke Norling, CEO, Nordnet: Thank you, Jacob. Next question comes from Martin Ekstedt at Handelsbanken. Thank you. Can you hear me?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah.
Lars-Åke Norling, CEO, Nordnet: Excellent. Best to check. First question. It looks like Norwegian trading income was at all-time high this quarter. I mean, it’s a great testament to your geographical diversification, right? Can you give us an idea of what drives this and how sustainable it is? Is it like a secular trend, do you think, or is it more of a temporary thing?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, I think Norwegian trading is, I mean, the Oslo exchange has been fairly okay this year. Also a strong interest. I mean, Norwegians trade a lot across borders. There’s been strong interest in trading both in the U.S., but also in some of the European markets where we also see good growth in those markets. I would say it’s partly sentiment-driven, but the share of cross-border trading, I think, is naturally high and always in Norway because it’s a small home market.
Lars-Åke Norling, CEO, Nordnet: Okay, understood. Maybe taking more of a step back with my second question. Without going into any individual names, there are a few examples now in Europe of U.S. online brokers knocking on the door and private equity perhaps taking a renewed interest in your sector. This usually means consolidation or at least increased competition over time, right? Does it impact your thinking around, for example, your German expansion? Does it make you more careful or does it contribute more of a sense of urgency perhaps to that venture?
Marcus Lindbergh, Head of Investor Relations, Nordnet: We are used to competition. The Nordics are ever since this very mature market, and a lot of savings capital here is always high competition. It’s going to be high competition in Germany as well, and we know that. We are confident in our offering with a broad offering, the one-stop shop, the really good customer experience, the overall low price, and also the trust part. Nothing has changed, I would say, regarding Germany. Also, since we already operate in four countries, to operate in the fifth country, we can do that with a fairly limited cost. At the same time, we create a rather big opportunity. It’s not like we’re going to need millions of customers day one to be profitable. We can build this over time like we’ve done in other countries.
Lars-Åke Norling, CEO, Nordnet: Okay, thank you. That’s all for me.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thanks.
Lars-Åke Norling, CEO, Nordnet: Thank you, Martin. Next question comes from Ian White from Autonomous Research.
Hi, thanks for taking my questions. Just two from my side, please, both around private banking. First of all, what KPIs might you be able to share regarding the revamped private banking offering at this stage? I’m particularly interested in any evidence you have that the revised offer is getting traction with clients and, importantly, evidence that it might be helping you to win clients and inflows that you might not have otherwise won. That’s kind of question one, please. Secondly, again, taking a slight step back on this topic, what makes you comfortable with the margin versus volume trade-off that is associated with the revamped offering? I mean, if I look at, say, just revenue to notional on the brokerage side, the bottom end of the revised private banking offer, customers pay about half revenue to value traded compared to what you currently earn.
How much additional volume do you expect to get versus the revenue margin you might give up, basically, if this initiative really succeeds? Thank you.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, the launch has been successful in Sweden. It was very well received overall. We see a clear pickup in sign-ups of private banking, about three times as high after launch as before. The launch is partly due to it’s also automatic opt-in that we didn’t have before. It’s anyway a clear step up of new private banking customers. What’s positive is we also see net savings from private banking in Sweden increasing. They were clearly contributing also to the growth in net savings in quarter three overall for the business. Hopefully, this will continue. As you know, we also launched Denmark, Finland, and Norway in this quarter. Really looking forward to that. When it comes to the business case on this, I can’t comment exactly on the volume versus margin. I mean, of course, we do this because we see a clearly positive business case.
Giveaway versus the existing setup and existing revenue we had in Sweden before we did this shift is not material. We see clearly that we have an upside on the volumes and new customers.
Okay, thanks.
Lars-Åke Norling, CEO, Nordnet: Thank you, Ian. Next question comes from Haley Tam at UBS.
Thank you, Marcus. Hopefully, you guys can hear me. Thank you for taking my questions. I have two, please. Could I ask you first on Sweden? The net commission income was flat quarter on quarter, even though we saw the increase in the number of trades, the trading days, the cross-border trade %. I wonder if you could help me understand the reason for the decline in the net brokerage income per trade. Is it related to private banking perhaps or some other kind of competitive pressure? The second question actually was just in Denmark. Could you maybe give us some indication of how much of the net transaction-related income in Q3 was due to trading in Novo Nordisk specifically? How would you encourage us to think about your Danish customers’ appetite for trading and investing from here? Thank you.
Marcus Lindbergh, Head of Investor Relations, Nordnet: I don’t know. Regarding Sweden, was it the income per trade or overall brokerage income?
Net brokerage income per trade had stepped down quarter on quarter, and also the net commission income was flat Q1 Q. That was really a trend I didn’t expect to see.
Yeah, I don’t know if you have any specifics on that, Marcus.
Lars-Åke Norling, CEO, Nordnet: Not sure, actually. We don’t have the.
Marcus Lindbergh, Head of Investor Relations, Nordnet: I think we can come back on that specific. When it comes to Denmark, in a way, Novo Nordisk, I can’t say how much was Novo Nordisk trading, but of course, it’s been a lot of Novo Nordisk trading in Denmark, but also outside Sweden and Denmark. Sweden, Finland, Norway has also been trading quite a lot in Denmark.
Got it. Thank you. I’ll have a chat with Marcus Lindbergh afterwards. Thank you.
Lars-Åke Norling, CEO, Nordnet: A comment on overall cross-border trading. We saw, of course, intra-Nordic cross-border trading increasing. We’ve seen a larger part of the increase was Europe outside of the Nordics. Next question comes from Enrico Bolzoni at JP Morgan. Please go ahead.
Marcus Lindbergh, Head of Investor Relations, Nordnet: I think you’re muted, Enrico.
Lars-Åke Norling, CEO, Nordnet: You need to unmute. Yeah, Enrico, can you hear us?
Marcus Lindbergh, Head of Investor Relations, Nordnet: He wants to put his questions in Q&A.
Lars-Åke Norling, CEO, Nordnet: Okay, let’s get back to Enrico. Next question we’ll take from Andy Lowe at Citi.
Thanks, guys, for taking the call. Hopefully, you can hear me okay. A couple of points of clarification, if that’s all right. Many of your European platform peers are starting to offer private market funds. Could you just maybe sort of outline your thoughts on that product going forward and just the sort of roadmap for crypto offerings and sort of latest developments there as well? Last week, Evans made a comment in the Q&A about their customer churn being sort of broadly flat versus last year, despite the increase in competition. It’d be really helpful if you could just clarify some numbers behind your customer churn, specifically in Sweden, but also across the rest of the group, if that would be possible. Thanks.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, we, as you know, we offer private market as well. The first product was EQT Nexus that we launched in Sweden. We also now have it in Denmark. We’re also building up a portfolio of private market funds that we offer on the platform, mainly to private banking. We have a cooperation with Schroders as well. We’re going to build out that offering over time. That said, the investment in the private market funds, since they’re a bit more long-term in nature, it’s okay, but it’s not a super high flow into those funds. It’s important still to have them on the platform for the segment that wants to diversify a bit into the private market funds.
Sorry to interrupt. Maybe put a few numbers on that, sort of how much of, I don’t know, the net flows are in private markets or total assets under customers.
Yeah, we can’t give specifics, but it’s fairly, I mean, versus the full net savings is fairly low. Still, it’s an important product to have in the mix because some customers want to have the private market access. It might be building over time. I think they are more long-term in nature. If you’re not long-term and want to sell off before, you’re penalized. That’s also a factor to take into consideration. I think over time it might be developing, but I don’t think any, I mean, the golden nugget for all the PE firms is to unlock all the retail capital, right? I don’t think we see very high retail flows into PE yet. It might build over time, but it will be a journey to get there. When it comes to customer churn, we don’t see any increased churn, really.
Of course, we keep track on churn, especially versus competitors, not least in Sweden. We don’t see any major outflows or churn. It’s fairly flattish on those 2% level that we’ve been before.
Great. Thanks so much. Just a sort of final thing is just on the crypto as well and sort of remind us what the product offering and what the demand has been.
As you know, we only offer trackers today, so listed trackers, mainly physically replicated Bitcoin, Ethereum, the most popular. It’s around 1% of the customers this year that have traded crypto, around 2% of traded value. It’s fairly small volumes, but it’s still important products to have for the ones that are interested in crypto. We know in Germany, most platforms there have spot trading in crypto as well. It’s something we’re looking into if that’s needed for the one-stop shop launch in Germany.
Great. Thank you very much.
Thank you.
Lars-Åke Norling, CEO, Nordnet: Thanks, Andy. We’ll try Enrico again. If you can unmute, I’ll just read it. Let’s see if you can unmute, Enrico. Go ahead. Enrico was kind enough to submit his question in writing. He says the admin error that led to the $18 million one-off as the loss could have been, let’s see, he said, can you let us know if you’re taking any actions to change the processes or if there are any issues with the processes to avoid this happening in the future, given that loss could have been higher if the stock was squeezed?
Marcus Lindbergh, Head of Investor Relations, Nordnet: Yeah, I mean, it was a single event and a complex issue or a corporate event also with this lack of information. That said, of course, we studied carefully how we can improve our routines. One is that we’re going to work even more closely with our American Depot Custody Institute to really ensure that we catch all aspects of a corporate event. This was two aspects of the event. We caught the first one, but not the second one. We’re really diligent that we get all the aspects of a corporate event. We’re also introducing AI now to help us, not least to go through prospectuses and other corporate event information to summarize things. We also know that we have a huge amount of corporate events every year. So far, we have very limited problems in this area.
We also know that some of the corporate events are more complex and more manual. To deal with those, we also have formed our expert group that deals with the most complex cases, which requires a little bit more hands-on managing.
Lars-Åke Norling, CEO, Nordnet: Okay, great. Looks like there are no more questions. We’ll end the call there. Thank you so much for your questions today. Thanks for attending the presentation. Please visit our website, nordnetab.com, or reach out to me if you have any questions. Thank you, everyone, and have a nice day.
Marcus Lindbergh, Head of Investor Relations, Nordnet: Thank you.
Thank you.
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