Storebrand ASA
OSE:STB
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
89.4
127.7
|
| Price Target |
|
We'll email you a reminder when the closing price reaches NOK.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Storebrand ASA
You don't have any saved screeners yet
Good afternoon, and welcome to Storebrand Analyst Conference Call. My name is Anna, and I will be your coordinator for today's conference. [Operator Instructions] I will now hand you over to Investor Relations Officer, Daniel Sundahl, your host for this call. Thank you.
Thank you very much. Good afternoon, ladies and gentlemen. Welcome to Storebrand's Fourth Quarter 2018 Conference Call. My name is Daniel Sundahl, I'm part of the Investor Relations team at Storebrand. Together with me, I have Group CEO Odd Arild Grefstad, CFO Lars Løddesøl, Executive Vice President and Managing Director Geir Holmgren, Executive Vice President Wenche Martinussen, and Head of Economic Capital Trond Finn Eriksen. In the presentation today, Odd Arild will give an update on the developments in the fourth quarter. CFO Lars Løddesøl will give an overall view of the financial development and dig into some of the more technical elements in the quarter. The slides will be similar to the analyst presentation released this morning and are available on our web page. After the presentation, the operator will open up for questions. [Operator Instructions] I will now give the word to Storebrand's CEO, Odd Grefstad, who will start the presentation on Slide 2.
Thank you, Daniel, and good afternoon, everyone. 2018 has been a strong year for Storebrand, with a group result of NOK 3.2 billion and a result of NOK 3.7 billion after taxes, due to a positive tax effect as addressed in our separate Stock Exchange notification. This is all-time high results for Storebrand. Our Solvency II ratio is also all-time high with 173%, 172% without any transitional rules. And we increased our dividend to NOK 3 per share. The underlying growth in the business is strong. It reduced in the fourth quarter by the weak financial markets. Weak markets also negatively affect our profits in addition to substantially reducing the performance fees compared to 2017. On the positive note, the development in the financial market, so far in 2019, has been strong and, to a large extent, reversed effects from Q4.If we then move to the next slide, this picture was introduced in our Capital Markets Day in May. It is a picture of our twofold strategy, with active management of the guaranteed business and run-off for capital release and profitable growth in our capital life savings business, through our position in occupational pension in Norway and Sweden, growing retails savings market and asset management business with our NOK 700 billion assets under management.Looking at the active management of our balance sheet, we continued to our strong cost control with costs for the full year just below NOK 3.8 billion. Our Solvency II came in strong at 173% for the year. At our Capital Markets Day, we guided on reaching a Solvency of 180% in 2021, all else equal. With a strong solidity development in 2018, we will, again, all else equal, start the capital release, our back book expected 1 year earlier. The growth in our front book has also continued through 2018, that was somewhat reduced by the financial markets in Q4. We've also continued our strategy with bolt-on M&A, and that leads me to next slide, Slide #4. Lately, we have landed 2 transactions with comparable size. We have sold Nordben, a currency-based run-off portfolio of international pension schemes, of total of SEK 6 billion. The sales will give a positive effect on Solvency of just under 1% point. So we also held our portfolio that is not statistically important to us. Meanwhile, we also buy a Nordic leading private equity company, Cubera. Cubera will strengthen our asset management operations in general and especially benefit our focus on private markets going forward. The acquisition price was initially NOK 300 million per yearly earnings before tax on NOK 6 to NOK 8 million. The buying price can increase with another up to NOK 325 million, depending on successful capital rise rates going forward.If we then move to Slide #5, the acquisition of Cubera will, as I said, adds debt to our asset management. In addition to recent stocks, interest-bearing papers and real estate, we see that assets equivalent to private debt, private equity and infrastructure are becoming increasingly important, both to our own life Insurance business and with regard to offering competitive asset management solutions to our institutional clients.Let's move to Slide #6, the growth. We have gotten used to seeing double-digit growth, both when it comes to savings and asset management. And the underlying growth is still strong in 2018, with a growth in premiums within Unit Linked business of 7%. Normally, a positive return on equity will add to this growth, securing a growth in assets under management well above 10%. We didn't see this positive market effects this year. On the contrary, we had fall in global equities with 11% year-by-year and that make up for the final growth number of 7% when it comes to Unit Linked. Asset management are hit by the SKAGEN effect in addition to our negative currency effect with weakened Norway and Sweden and negative net flows in SKAGEN. Our bank is maintaining a steady growth of 10% in 2018, and we are now also seeing growth within our insurance business. The profit development have been strong, both when it comes to our banking and insurance operations this year.If we then move to the Solvency movement on Slide #7., our Solvency has really strengthened this quarter despite the volatile markets. If you break this down, the movement from 166% to 172%, we see that the market development in the quarter has put a strain on our Solvency through a 14% fall in the growth index and 20 basis point reduction in the 10-year interest swap rates in Norway and in addition of widening spreads. We have executed active risk management measurements and have maintained buffers in a very good way in our life insurance company. All this together as well has reduced the Solvency ratio with 6% points.Let me now -- that EIOPA has -- due to market position, on a quarterly basis, is adopting new stressors for equities and for volatility adjustments. And this new element from EIOPA this quarter has given a positive developments on the 6% points upward. And then you see that their volatility adjustments and their reduced stress for equities has really then taken out to the negative market conditions altogether. On top of this, we have strong result of the tax in the fourth quarter, and this is mainly due to the tax income of NOK 1.6 billion that we noticed the market with in a separate press release. And these added a 6% point to the solvency for the quarter. And altogether then, Solvency ratio of 172% and a minor adjustment for transitional rules leave us to 173%.If we then look a bit closer into the solvency sensitivities on Slide #8, we see that the sensitivities is very much on the same levels that we saw in the Q3. We can notice that a fall in the interest rate of 50 basis point from today's level. We'll entail that we -- that transitionals, once again, take effect for interest rates. And in fact, these will increase on the top of solvency ratios.Then, at last, before I give the word to Lars, if we look at the solvency movement for 2018 on Slide #9, we see that there has been a very strong development for the year on a 22% point increase for the full year before dividends, substantially more than our guiding of 10% to 12% point on annual increase before dividends.So by that, I'll give the word to Lars Løddesøl.
Thank you, Odd Arild. Let me briefly go through some of the figures with you. The profit before amortize -- this is on the key figures, Page 10. The profit before amortization at NOK 563 million is rather weak. The ordinary operating profit at NOK 654 million is okay, but will usually be higher in the fourth quarter due to booked performance fees. Adjusted for performance fees, the operating profit is NOK 565 million, somewhat weaker than our guiding. If we look at the earnings for the full year, we've had 3 quarters delivering better than guidance and one weaker. Looking forward, the full year operating profits divided by 4 gives a reasonable guiding on the earnings part going forward. The main reason behind the weak quarter numbers are a result of financial markets and for one-offs.In Norway, we have a regulatory retail equity savings scheme called ASK. Storebrand and SKAGEN have each developed its own platform for ASK. As partners integration with SKAGEN, we have established that the SKAGEN platform will be rolled out for the whole group, and we've taken one-off charge for the closing down of our own development part. Second, in the fourth quarter, we have booked approximately NOK 20 million in advisory fees, primarily related to the Nordben sale and ASK in December and the Cubera acquisition announced Monday. Three, furthermore, we've taken a charge for a renegotiation -- a renegotiated remuneration scheme for our sales force. This will not lead to higher costs going forward, but it's a one-off compensation. And finally, we have booked 2 months regulation fees and paid-up policy book during the year. This income has to be reversed by NOK 38 million in the fourth quarter and reduces the income line. The full year number is correct, and we are reviewing our processes to avoid the similar adjustment in the future. The final financial results -- sorry, the financial results is weak in the quarter, very much in line with financial markets and with normal financial market volatility. Worth to notice is that increased credit spreads due to short-term negative mark-to-market on our company portfolios in the long-term pick up in returns. As long as there are no defaults, there is no long-term effect. Furthermore, with positive financial markets since year-end has more than neutralized the fall in assets under management that we saw in the fourth quarter.Clipping over to the next Page 11, this is a more traditional presentation of the results. And we see the fee and administration income is down in the quarter, primarily as a consequence of lower performance fees in 2018 compared to 2017. For the year as a whole, the income is up 5%. Insurance result is up by 13% during 2018. The cost level is up due to the acquisition of SKAGEN, but is below the targeted NOK 3.8 billion for the year as a whole. This means that adjusted for SKAGEN, the cost level has been nominally flat for 6 years in a row, since 2012. We aim to maintain the same nominal level at least until 2020. The operating results for the year is up 4%. Adjusted for currency fluctuations in SKAGEN, the underlying Storebrand operating result is up by 14% and confirms the strong underlying growth.Under tax, we have a positive contribution of NOK 900 million, following the tax gain of NOK 1.6 billion announced in January. This is a consequence of new tax rules for life investment businesses, separating the tax accounting for customers and pension providers. With this change, we will have a more predictable tax charge of 21% to 23% per annum going forward. And large tax differences, both assets and liabilities, have been removed from our balance sheet. Net-net, we still have approximately NOK 8 billion in tax loss carryforward -- tax losses carryforward. Although the fourth quarter results were weak, 2018 comes out as one of the best years we've ever had. Furthermore, the Solvency position has been strengthened. We're paying out more dividends, and the market position is strong.
Thank you, Lars and Odd Arild. The operator will now open up for questions.
[Operator Instructions] And the first question is from...[Technical Difficulty]I'm so sorry, ladies and gentlemen, it seems that I've been turn out from my system. I will try to get another operator to help you as soon as possible. Please hold the line, please.[Technical Difficulty]Ladies and gentlemen, we're so sorry for this. Operator coming in to help you with the Q&A. We have a couple of people in the queue, I could see, but I can't access it. Then we have an operator coming in ASAP.
The next question comes from the line of Peter Eliot from Kepler Cheuvreux.
Got it. I have 3 questions from me. And the first one was, I was just wondering about how you now think about the sort of the balance between growing volumes and margin? I mean, in the report, you make a few comments about margin pressure in Unit Linked asset management under insurance. And I'm not -- perhaps, I think I'm right that DNB has been cutting Unit Linked fees quite heavily. I mean, I guess, in Insurance, a few years ago, you were sort of forecasting double-digit growth rates there that you've had some distribution issues, but those should now be over. And then going forward in those 3 areas, how should we think -- are you thinking you need to take the foot off the accelerator to protect margin? Do you think there is risks to margins or can margins be maintained? Just wondering if you could talk about that a little bit. Sorry, that's a long one. But second is very short. The second one is SKAGEN net flows, would you care to give us the numbers for Q4 and maybe any comments on the outlook? And the third final one was, I was surprised with the dividend that it was all normal, but they're very welcome. I'm guessing that kind of says to me that you think you currently have a sustainable EPS of NOK 6, and I'm not quite -- I mean, it seems quite punchy, that's probably the wrong way to think about it, but I was just wondering if you could explain your thinking behind setting it all at normal?
Should we start -- if you talk about the margins, I think, first of all, you need to recognize that our business is very much corporate pension that is already on quite low margins in the Norwegian market and the bulk of the business is really within defined contribution. I think DNB has done something on their direct mutual fund piece for the retail markets. But it is also, I mean, the fact because it's somewhat to reduce the ordinary fees, but it's also introducing performance fees for, as I understand, almost all of their mutual funds. We have, of course, an ongoing process looking into our fees for their retail markets when it comes to mutual funds, both in active funds and for more beta type of funds and we feel that we have well pricing that is giving the right value to the customers as we speak, but that is, of course, an ongoing process. I think when I look at the more pension market, it's, of course, more like high competition in the market. And also process that in 2021, we will have our own pension accounts coming into the market, where active management of the defined contribution will be combined with paid-up policies without investment choice that is combined in account for the customers. And that is very effective market. Of course, that means that we are very well positioned for with our 31% market share. But that is also attractive market, of course, for everyone else around those. So that is -- and that's our aim and that we like to try going forward. And so there is no -- I feel that we are in a market that is really growing very fast. And the growth within our pension market will continue to go forward in the Norwegian market and in the Swedish market, and we will take our share of that growth. And the markets -- the margins we are seeing in the pension area is quite sustainable, I think, going forward in the, well, short and near-term future. When it comes to SKAGEN, the net flow for the year was minus NOK 40 billion.
NOK 14 billion.
NOK 14 billion when it comes to the net flows. Most of that was earlier in the year when we had some changes in the portfolio managers. At the end of the year, we saw that full performance and that you will see in the funds was much higher. And I think we said earlier today that in December and separate had a plus inflow in our flagship from quantity. And the development so far in 2019 has been very good, both when it comes to absolute return and relative return in the funds in SKAGEN altogether. Dividends, well -- this year, we have really had a very strong year when it comes to capital streaming to the holding company. We have a very solid position. I think we have also quite a solid result generation going forward. We feel comfortable about meeting our target of having a nominal growth in the dividend or at least the same level that we had last year. And based on our expectations of the results from the company that should be a sustainable position going forward.
The next question comes from the line of Matti Ahokas from Danske Bank.
I'd like to continue on the same topic as Peter earlier on. The dividends, you already have the strongest solvency margin you basically ever had and a lot of positive one-offs. And if I understood you correctly, Odd already mentioned that the capital release from the guaranteed back book could already start the year earlier than you originally forecasted. So I'm still a bit puzzled on why the dividend isn't higher than it is taking into account all these factors that has been mentioned? Second question is regarding the performance fees in the savings business, obviously, down by around NOK 200 million. Is the underlying level, I know it's probably difficult to say, but is it closer to NOK 200 million or the NOK 300 million it was in 2017 going forward in your opinion?
Can you repeat the last question, which segment or which slides were you referring to?
So the saving business, you write in the report that the performance fees altogether were -- was NOK 90 million versus NOK 300 million in 2017 for the full year 2018. So is the underlying level closer to NOK 200 million or the NOK 300 million we saw, I guess, the NOK 90 million in 2018 is probably not what we should be looking for in the future?
About the dividend, we have been very clear that we see that the levels over 180% in solvency is the level that we feel that we have a level where we can start give extraordinary dividends based on the capital release from the back book. And everything equal based on having underlying solvency ratio 172% as we speak. We expect that, by mathematics more to say, to come one year closer based on the guidance we gave on our Capital Markets Day. And I have to say that the result we gave out -- the dividend we gave out now is actually 8% of the result before we take into account the extraordinary element from tax values, I think, special. So Lars will answer on more asset management and performance fees.
Maybe I'd just like to add one comment. You mentioned that there were lots of positive one-offs, and the fourth quarter was basically a number of negative one-offs, not positive one-offs. So in the beginning of the year, we had a positive one-off on the longevity results strengthening over NOK 149 million, but there has been more balance than number of one-offs positive and negative one-offs after that. And I would also say that the tax effect and the positive contribution on tax effect has given an opportunity to take up an additional dividend from the life company to the holding company, which strengthens the dividend in the holding company going forward. So although, yes -- so that's the positive consequence of that. When it comes to performance fees, the performance fees are the fees that are not certain before they are booked at the end of the year. And if you look at SKAGEN in isolation, they have been between close to 0 and above NOK 1 billion for the last 5 or 6 years. So there is some -- a wide difference between the upside and as a downside [indiscernible] into that 0. In Delphi, the fees has been between about NOK 50 million and NOK 150 million on an annual basis for the last several years. So that's really the outcome is a broad range here. What we have said that, if Delphi and SKAGEN delivers approximately benchmark performance, they will deliver an excess of NOK 200 million on an annual basis. But obviously, over time, we do expect performance over and above the benchmark, that's why we take risk and, therefore, we do expect more over time. But there will be additional volatile elements, and there is nothing called normalized in that space.
Very clear. If I may follow up on -- Odd Arild, the dividend, sir. The extra in 2017 was based, I guess, then on the old dividend policy, so we should be kind of looking at the 180% level as the kind of hard threshold for anything extra in the future?
Well, the dividend policy now is paying off more than 50% than of the result after tax and having an increased dividend on annual basis, a nominal increase in November. And the threshold that we have put forward is that normal dividends will be paid between 130% and 180% in solvency. And when we move above 180% in solvency, we start releasing capital from the back book. And as we said in our Capital Markets Day, within our 10 years horizon, we expect to release around NOK 10 billion from our back book.
The next question comes from the line of Ashik Musaddi from JPMorgan.
I just have few questions on -- so first of all on Solvency II capital generation, which is on Slide #9. Can you help us, like, this 10 percentage point capital generation was like group result excluding the tax impact. I mean, what does it include? Does it include the tax benefit -- sorry, does it include the UFR? Does it include any release of capital? Can you give a bit more clarity on that because this number was a bit higher last year, I think 11% or 12% and now it went down with your SCR coming down as well? So can you just give us a bit of composition of this number, 10%. That's number one. Secondly, I'm sorry to go back to the asset management. Can you just remind us as to what your normalized earnings for asset management, excluding the performance fees of SKAGEN and Delphi? So what would be the normalized asset management earning excluding those 2 items? And thirdly is, I mean, if you think about the combined ratio, I mean, clearly, your guidance is around 90% to 92%, but you have been doing below that for quite some time. So how should we think about combined ratio in the PMC business going forward?
Thank you. Let me start with the first question about the capital generation. Today, we have choose to show the capital generation in this picture, if [indiscernible] taking the group result, as it comes from the equity generation in the group balance sheet. If you take this year's result and add on amortization of intangibles and divide on the SCR, then it will get to 16%, which you can then -- again can be divided in those 10% and 6% coming from the tax elements. So that's how we have shown to or as recently shown it. You can -- also, I showed it in a different manner, where we separate what is expected as a results in the solvency models. About this capital generation [indiscernible] year.
Sorry, just a follow-up on that. So what you're saying is this group results still don't include any release of capital. And if I remember correctly, your release of capital was earlier plan from 2021. And now it is bring forward to 2020, is that correct? And that would be around NOK 1.3 billion, NOK 1.4 billion?
That's correct. When it comes to the dates you're mentioning. I don't want to comment on your capital release in [indiscernible].
Okay. Then on asset management earnings?
Yes, the normalized earnings in the asset management business, you can derive from the numbers we present, which is roughly NOK 500 million, based on today's AUM and with no performance fees whatsoever. And then there will be performance fees on top of that and the AUM has been growing over time. And we are doing a lot of measures to improve the profitability and growth of that business. We also have a target that was announced on the Capital Markets Day, which was well, while we -- I think it was close to NOK 1 billion in results that tells something about the growth and the NOK 1 billion does include performance fees, but nevertheless we have a strong growth agenda within asset management. And the last one on combined ratio performance?
Combined ratio, going forward, we said all along that we've had the number of years now or a couple of years anyways with very good combined ratio numbers and that we are long-term aiming for 90% to 92%, which means that when we've had the combined ratio below that we've been able to adjust prices on certain products and to invest somewhat more in growth. And what we have done, one of the things we've done in terms of growth in the fourth quarter last year is to cooperate with a sales partner that has an agent that is selling more insurance for us, and that has negatively contributed to earnings, but positively contributed to the growth that is starting to pick up now in the fourth quarter.
And the next question comes from Blair Stewart from Bank of America.
I've got 3 questions, I think. The first one, just drilling down into movements in capital requirements. I think it's on Page 35 of the interim report. The capital requirements reduced in the year, but that was mainly due to the market elements. I just wonder if Trond perhaps you can go into a little bit more detail there and given the equity markets have recovered, does that capital requirement go back up? And I guess, aligned to that and talking now about the possibility of additional capital release, the 2021 guidance I took to be twofold, firstly that 2021 was the date when you expected to reach 180%, but also that 2021 was the time where you expect it to be physically seeing the back book rolling over and starting to release capital that way. So my question is when we get to 2020, which is a year earlier, we may well be at the 180% threshold for solvency. But will we really be seeing capital falling off the back book at that time? So I hope that's clear. And my final question was really just on the holdco liquidity. And is that something -- I think you've said in the past that you wanted to run that with around 0 net debt. I just wonder if that's still the target or what -- how we should be thinking about that additional liquidity that's been pumped into the holdco from the life company and the dividend?
Thank you, Blair. First on your first question regarding reduced stress levels from the market elements. Yes, you're correct there, right about the strong equity markets then what will happen is that they will increase the holdings in Unit Linked business that they will generate more profitable business and they will increase the SCR stemming from that business. So given, increased equity markets, given both more profitable business that, I think, increased the SCR and a little bit probably also have a negative effect on solvency number from increased equity stress levels, which is an all-time normal at this quarter in the 32.9% and you know that, that's a basic stress, it's a 39%. So if this -- yes, the other element is credit. You did have also -- had positive contributions this quarter from increased volatility adjustments that goes into that plan as well. So you are perfectly correct, strong financial markets with increased the SCR from the markets. Saying that, you should also bear in mind that we will in strong equity markets and strong credit markets gives more buffer capital, which is really positive to the total risk mitigation of the Storebrand Group and that leads partly into -- I think I'll leave it there.
And the next question comes from Kevin Ryan from Bloomberg.
Sorry, I think we haven't answered the previous questions.
Oh, I'm so sorry, sir. [Operator Instructions] I will transfer him back to the call.
Yes, when it comes to the next question, Blair, this was release on the back book. There will be a release of the guaranteed back book at least in the estimates [indiscernible] but didn't have a reduction of reserves [indiscernible] comes from that we expected to -- the interest rates to increase in the forward rate, [indiscernible] decrease the capital or the SCR from that book. And also now with strong equity markets in the first month of 2019. We have also given a lot new capital, which also reduces the capital requirements from guaranteed back book. So there will be absolute reduction in the SCR coming from the back book.
But as we've illustrated, it's not binary thing, it's a concave, it gradually happens over time and we finally start releasing capital on the Swedish book this year and we start releasing more capital from other places gradually next year...
Yes, and when it comes to the liquidity, it's true that we have a net debt ratio 0, that's again the aim for the life -- for our holding company. We use this opportunity now with extraordinary results in the life insurance company, also due to the tax results to put some more cash in the holding company. That is helpful when it comes to ensure that we are able to meet our obligation also going forward to have nominal growth in the dividend even if we have a more weak year. And also, it is a very good position to be in to be able to, also, release capital above the nominal results when it comes to taking off results from life insurance companies based on our capitalization above 180%.
I do think it was Stewart from Bank of America, your line is open if you want to continue, ask your question.
Yes. Maybe I can just come back on the point about excess capital return. So just to be clear, so you think if all going well, you should be reaching 180% sometime next year? And there will be scope for some capital to be released from the back book, although I take the point, Lars, that it's likely to be smaller then that you talked about that NOK 10 billion, but that's going to ramp up over time. But presumably, you can also think about just paying a higher proportion of your earnings as a dividend, which would be just not adding the retained earnings to your solvency.
To answer on that, first of all, of course, anything equal. You see that this year has been a very strong year when it comes to tallying solvency ratios for 22% points. We have guided on long-term 10% to 12% growth in the solvency ratio annually. And with 50% payout of dividends that is reduced then to 5% to 6%. And as we said to you, the more you pay out in the normal dividend, of course, the less you will have to increase the solvency position to get above 180%. Also this is, of course, how it works. And then based on these numbers, our estimate is that we will need to close 2019 and 2020 to now in a normal situation, reach above 180%. It's a lot of moving factors, in that estimate, of course. But that is just being equal to what we said on our Capital Markets Day, we've now 172% in solvency, that is much better than we have than we had on our Capital Markets Day back in May. This seems everything equal to have become 1 year earlier compared to our guidance on Capital Markets Day.
And the next question comes from Kevin Ryan from Bloomberg Intelligence.
I just had a question about the retail funds platform, please. Could you give us some guidance on whether the cost of that have now been fully expensed or whether we can expect some additional costs this year? And also can you offer some guidance as to how we should think about the volume from that platform?
We -- this was a -- the regulatory framework in Norway changed to allow for an ASK 2017. And we've built 2 platforms through to 2017 and 2018. One for Storebrand, one for SKAGEN. Now that we've merged the 2, we are writing off the investments in the Storebrand platform. The SKAGEN platform do have some cost that is on the balance sheet and that would be written up over time, and we'll continue to develop the joint platform together. So there is nothing extraordinary related to that, that's a normal development and adjustment to the market. And in terms of volumes, this is the way to place your equity investments, whether it's equity investments directly or through mutual funds. And it's a way to have individuals without large fortunes to be able to have the same benefit as if you were a wealthy individual and you had your own investment company where you could trade in and out of equities without releasing tax. So this is a way to allow normal people to invest in equity-based savings instruments without releasing tax when they switch in between the 2. So the overall market for equity-related investments should go up as a consequence, and our aim together with the investment in SKAGEN is to have the #1 position in that market over time. We currently have around 20% market share, which we aim to increase to about 25% market share in a growing market.
Ladies and gentlemen, there is no question at the moment. [Operator Instructions] We do have a quick response from Peter Eliot from Kepler Cheuvreux.
Just wondering if I could just clarify the timing. I mean, I noticed very -- lots of uncertainties here. But I mean, if you allow the recovery of markets at the start of this year and your sort of 5 percentage points in asset dividend guidance and everything seems -- I thought was sort of pointing towards the start of 2020 when you're in that position of the 180% in a position to start returning. When you said to in answer to Blair's question, you said you needed 2019 and 2020 to get there, so does that imply the end of 2020? So just wanted to check whether this -- we're talking about something different there or what that was? And then if could ask another question, you reported a negative financial results in both Unit Linked product and in retail banking. I was just a bit surprised actually, I mean, I didn't really expect to see financial results going through those. I was wondering if you could just explain what caused that?
I'll start with the guiding. I must apologize. It's my English that's also a bit confusing here. I don't -- I didn't mean to say that it was end of 2020 or middle of 2020. I think it's very difficult to be at plus 5% that's when it comes to really the solvency. But it's more like saying that adding, well, 5% points solvency in 2019, well, move us up to around 177%, 178%. And then you will also need to have some time in 2020 to reach up to the 180% solvency. So that is again, I would say, uses a lot of moving parts into that calculation, but that is the thinking anyway when it comes to trying to explain it.
And with respect to the negative financial return in Unit Linked and banking, there is one product with a small -- a small product with a limited interest rate guarantee, which was in the Unit Linked platform. For technical reasons, which had the negative contribution in the fourth quarter. You should not expect that going forward, but that was booked in the fourth quarter. With respect to the bank and the negative financial return there, it's related to a way to account for the -- it's IFRS 9 and the way you account for losses in the book, where we've made a model change, which increases the reserves for the -- in the bank. So it's not related to any change in the expected losses, but an adjustment to the IFRS 9 regulations as to how you model or how you reserve for losses in the retail portfolio.
And the next question comes from Matti Ahokas from Danske Bank.
Yes, a quick follow-up. I just noticed on Bloomberg that Storebrand Bank is planning on an 81 and subordinated debt issue, is it just normal refinancing or are you planning on changing the capital structure in the bank and maybe up-streaming more dividends out of there?
It's just normal refinancing.
[Operator Instructions] There are no further questions coming through, so I will hand the call back to you. Thank you.
Thank you ma'am very much. Before we end, I would like to remind you that we will be present in London tomorrow and we hope to see several of you there. Thank you very much. Bye.