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Earnings Call Analysis
Q1-2024 Analysis
Nordnet AB (publ)
The company reported its highest quarterly revenue and profit ever. Revenue reached almost SEK 1.3 billion, up 11% year-over-year, while profit was nearly SEK 900 million. This exceptional performance was driven by growth across all revenue streams, including brokerage, fund income, and net interest income.
Customer growth accelerated by 10% compared to the previous year, adding 58,000 new customers. Savings capital grew significantly, supported by both market performance and strong net savings, achieving a record high of SEK 900 billion on the platform.
The company announced the sale of its secured lending business to Ikano Bank, which will free up around SEK 3.8 billion in liquidity and lower capital requirements by approximately SEK 350 million. This transaction, expected to close within six months, aligns with the company’s focus on core business areas and is anticipated to have a negligible impact on the P&L.
Income per trade rose due to an increase in cross-border and retail trading. Despite a decrease in the number of trades, higher income per trade compensated for the difference. The fund business showed notable performance with capital in non-net-branded funds now making up 25% of the total fund capital.
Operating leverage remained robust with costs increasing by 10% year-over-year, attributed to cost phasing. However, the company maintains guidance for mid-single-digit cost growth for the full year. Profit margins improved significantly, underpinned by scalable business operations.
The company saw tremendous customer growth in Denmark, with a 70% increase, and 29% growth in savings capital. This emphasizes their geographic diversification strategy. However, in Sweden, net flows were below expectations, with the company attributing this to its focus on high-end segments like private banking.
Net interest income outlook remains stable despite slightly lower deposits due to higher interest rates. The company's liquidity portfolio is expected to generate SEK 1.6 billion in revenue for the year.
The capital base exceeds requirements by SEK 1.7 billion in risk-weighted terms and SEK 1.9 billion in leverage ratio. They anticipate being able to absorb up to SEK 38 billion in new deposits without jeopardizing capital constraints.
Revenue is projected to continue growing with cost growth controlled to mid-single digits. The buyback process is progressing, and the company plans to increase marketing spend in H2 to boost brand awareness and customer growth. The launch of a new Danish pension product is on track for either the end of 2024 or the beginning of 2025.
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My name is Marcus Lindberg. I'm the Head of Investor Relations at Nordnet. And with me today, as usual, I have our CEO, Lars-Ake Norling; and our CFO, Lennart Kran. Lars-Ake and Lennart will start off by presenting the results, and then we'll have a Q&A session.
During the presentation, everyone will be on mute, and then we'll have a Q&A session. [Operator Instructions] The presentation itself is available on our corporate website, nordnetab.com. Okay. Let's start the presentation. Lars-Ake, please go ahead.
Thank you, Marcus. You can go to the next slide. So overall, a very strong first quarter. We've seen the highest quarterly revenue and profit ever. We also see continued growth across all of our revenue streams, both brokerage, fund and net interest income. And also a clear step-up in customer growth and net savings versus last year from a strong market sentiment.
Very good progress also on our fund focused strategy with no net funds going by 50%. Net interest income outlook stable despite slightly lower deposits, but we also see a slightly higher interest rates past compensating for that. Cost growth is expected to trend in line with guidance for the full year. It was a very strong capital situation, where we have a post dividend of SEK 7.2. And the buyback process is ongoing. And here, we have handed in the application to the FSA.
We also concluded our strategic review, our secured lending business, and we announced a sale of that business to Ikano Bank on Friday. And this is a very small part of our business and not core. And we also see that this transaction will not have a material impact on our P&L, but it will free up around SEK 3.8 billion, the portfolio volume in liquidity as well as lower capital requirements of around SEK 350 million.
And the transaction is estimated to close within 6 months after regulatory approvals. And looking at some of the numbers, we see customer growth picking up. We see 10% year-on-year growth. Savings capital also very strong growth, both from market growth, but also very strong net savings. And we have a record high sales capital of SEK 900 billion on the platform.
Number of trades, a little bit down versus last year, but income for trade is considerably up to higher share cross-border and retail trading. So looking at the revenues, I said a record almost SEK 1.3 billion in 1 quarter. That's up 11% since last year and good growth in all revenue streams.
Cost is 10% year-on-year, which is a little bit on the high side, but this is due to phasing of cost in 2023, where quarter 1 in 2023 was lower. And we expect to deliver on the estimate or the guidance of mid-single-digit cost growth for the year, excluding the additional marketing costs.
And the profit, we see a very good leverage -- operating leverage in our business and also a record profit of almost SEK 900 million for the quarter. And also very strong development in customer growth and net savings. And there's a clear pickup versus last year due to strong market sentiment, where we increased the customer base with 58,000 customers in 2024 and with a net savings of SEK 19 billion.
And our geographical diversification to risks that this small that we have, but also enable growth, as we talked about before, but especially the 1 lift or a comment at Denmark this time, where we see a tremendous growth of 70% in customers and 29% in savings capital.
Commenting a little bit about our different revenue streams, starting with the brokerage. We see a number of trading customers are -- continue to pick up due to the macro and market sentiment. Trades per trading customer is fairly stable in spite of the volatility is actually on a very low level. You can see that on the mid-next up to the right in the quarter. And share of cross-border trading is stable of close to 30% this quarter.
And like we also moved around before, we see the number of trades per trading customer is still lower than we see so pre-COVID. But in spite of this, the number of trades per day is almost doubled compared to 2019, and that's because that with more than double the customer base from 900,000 customers to 1.9 million customers now since '19. And we also see a higher income per trade is up 34% versus what we saw pre-COVID. And that's due to the higher share of cross-border trading due to the country mix. So we see higher share of cross-border trading outside of Sweden.
Also very happy about the development of our fund business. We put a lot of focus on this, as you know, the last couple of years. And we see the fund capital growing 2x the total savings capital. And we have especially strong growth in our non-net-branded funds, where we now have around 25% of the fund capital in the non-net funds. And also, 40% of the net buying that we've seen in the last 12 months is going into the non-net rapid funds.
And also, we see that more close to 50% our customer base now own funds. We also see stabilization of the active share of around 32% versus what we saw in quarter 4. Comment a little bit then on net interest income, starting with the deposit. We still see low deposit level versus savings capital is all-time low of 7%. Historically, we see levels around 10% to 14%. And we also see a slight decline on deposits this quarter in spite of very strong net savings and dividends. And the reason for this is that the customers have been buying -- net buying both equities and funds in record numbers. It was SEK 22.5 billion net buy this quarter, which is, of course, very good for our core business overall.
Looking at the different components and on the net interest income, starting with the liquidity portfolio and a snapshot there. We estimate SEK 1.6 billion revenue from liquidity portfolio, consuming down the volume we see in 2024 and also the consensus on the market trades. And as you see, we have a little bit lower amount in the liquidity portfolio this quarter, SEK 41 billion versus SEK 43 billion last quarter, due to slightly lower deposits.
But on the other hand, the interest rates parts have been adjusted up a little bit, and that's market-based. And the main sensitivity here is, of course, the positive development. But as we show, we are on very low levels. We'll likely have an upside on the deposit levels going forward.
And then the lending portfolio, the snapshot for that one is also SEK 1.6 billion, assuming then the volume we saw in quarter 1 with the interest rates forecast, with the pass-through model lending of 50% mortgage on secured close to 100%.
And if you see the development in the lending portfolio, we have a strong growth in margin lending and a stable development in mortgage. Personal loans were unsecured, but especially more in lending, where we want to have growth because they're supporting our core business, but it's also the lending that's least sensitive to interest rate changes, where we estimate a pass-through of max 50% when the Central Bank starts cutting their interest rates.
And here, we likely have an upside also on higher volumes for the rest of the year. Also, as we know, it's a low-risk lending portfolio. Loan-to-value is on low levels, around 45% for mortgage, 35% to 41% for margin lending. And also credit losses are low. It's basically on the unsecured credit loss is around 2% of the lending volume, which is still on a very good level in this market that we see today.
Then looking at the deposit interest that we pay on our different accounts. And the estimate here is that we're going to pay out SEK 600 million based on the volumes we saw the end of quarter and 100% pass through of IPO changes going forward. And of course, the sensitivity here is how much more money we're going to add on the savings account for the rest of the year. But you also have to remember a larger part of the flow into the savings account are external money coming from external banks that we also will then have a yield in the liquidity portfolio.
But as usual, we see highest numbers in Sweden go to the savings account, mostly larger customers there, more focused on interest rates. And we see some flows in other countries, but not at the same level, but in spite of having very good interest rates in those countries as well.
So in summary, on the revenues, it's very good growth in all revenue streams, both net interest income, the fund business and brokerage business, if you look on the period from 2019. Again what I said, record high savings capital on the platform of SEK 900 billion.
And looking at the margins, especially on the brokerage margin, we see a pickup this quarter, and that was due to the high share of cross-border trading, but also that we see more trading from the retail segment versus the trader segment. And also, the fund margin, we see stabilizing around 25 bps, both from a slowdown of the shift from active to passive, but also when customers buy passive or no net index passive funds, which they do, to a large extent, we have a higher margin on those in expense compared to customers buying externally index funds in the platform.
So looking at the full P&L, then as you know, we have had a very good revenue growth the last year, so around 30%. At the same time, a very scalable business model. So cost growth has been around 5%. So basically, the entire revenue growth ends up on the bottom line. So it's a true position of profitable growth.
And of course, continue to release new features in our app in Web in a very speedy manner, where we update the Web every second hour and app every 3 days. And this is just a few select things where we launched a new fund inspiration pages to even more support the fund business and overall 26 new versions of the Nordnet app during the quarter, and especially a lot of new functions for Shareville. We have also a little bit more advanced order screens. And also we released MyFeed, an endless scroll of content. That's based on machine learning and finding content that interest you as a customer. And now to Lennart.
Thank you so much. And as you all know, we have a very strong capital and liquidity position. Even though we bought back SEK 500 million of AT1 here in March as planned and announced before, we still have a capital base exceeding the requirement of SEK 1.7 billion in risk-weighted and SEK 1.9 billion in leverage ratio requirements. This all gives us, as you know, the constraint is the deposit, the capacity to bring in more than SEK 38 billion in deposits to not to get below the 4.0% as we have said as a target or the SEK 55 billion before we reach the 3.5% as a regulatory requirement.
We have also proceeded with the plans to buy back shares and submitted the application to the FSA, and they have up to 4 months before they had to reply. We expect it to be earlier than that. But after that, we can go further on with our plans of that.
The liquidity position is, as I said, very strong as well. We have more than SEK 41 billion in liquidity, and that is about 63% of the deposit rates. So we feel very comfortable with both the liquidity and the capital situation going forward, and that in spite of dividend paying out now in May, SEK 1.8 billion, and with those buybacks that we plan ahead as well. Thank you.
A little bit on a strategic focus, the next. So we have 4 key strategic ambitions. Started, of course, with having the most happy customers, and we want to be one-stop shop then for savings in investments with an outstanding customer experience. And to get there, we are then delivering on our customer promise of building the best platform for savings and investments. But also now to have happy customers who really need to have professional and talented employees and where we have also engagement within the employees and also that we can attract and retain top talent, which we can. That is a sustainable business.
We are a trust business. We need to earn trust every day. And of course manage our compliance risk and other risks in a good way and overall be a trusted like brand. And the last area is profitable growth to capture the fantastic growth potential we have in the Nordics and to continue to take market share in a growing segment's market. And also, of course, focus on having a scalable business model also going forward to cost control.
And as you've seen, we have had very strong customer growth over the years and has been picking up the last couple of years. And the reason for the strong customer growth is twofold. One is that in our critical mass, enough customers in all countries to drive [indiscernible] growth, but also that we continuously improve the customer experience. And we also see that the savings capital is increasing even on a higher rate than the customer growth from both market costs but also, of course, from net savings.
And we are taking market share in a growing savings market. We have around 7% market share now in the customers in the Nordics and around 6% market share of the addressable savings capital in the Nordics. And that's SEK 4 trillion today in addressable market, which is big, but that's estimated to grow to around SEK 20 trillion in 2026, both from underlying market growth, but also that we launch new products like Levante product in Denmark.
And to the right, you see we have highest market share equity train and lower market share in from summation. And that's why we also put a lot of effort in the fund and pension area. But we also see quite good growth in market share in those areas today.
And we also see here a stable cost development in spite of more than doubling then the customer base since '19 from 900,000 customers to 1.9 million customers today. So we have a very scalable business model, but also very good cost control overall. And the main levers for the cost control and the scalability is that they have a very modern, scalable cloud-powered tech platform that can onboard a lot of new customers without driving costs, and also that we work extensively with automation and simplification of all of our processes, which is a win-win, and it works better for the customer, but at the same time, we scale better.
Also very highly efficient customer growth with -- mainly based on PR and word of mouth, lower acquisition cost and overall also low churn and high last mile value. And we also worked very extensively with our third parties to manage costs by them.
And looking at the financial targets, we are basically in line with all the medium-term financial targets. So we were not picking up and/or slightly above 10% on the customer growth, where we were a little bit below before. But otherwise, we're in line.
Now key priorities for 2024. We work hard now to prepare for the launch of the Danish levered pension products. We have sent in the application to set up a branch in Denmark. And we plan to launch this product end of this year or beginning of next year. And we're going to continue to expand our other branded fund offering. We launched a Swedish small cap index fund this quarter. And we continue to work hard then to integrate Shareville in our app and Web, and we come very far. And we expect to close the old Shareville in -- during quarter 2. But we also see that this integration of Shareville to the Nordnet app Web has been very successful. It's been driving engagement. We see a clear pickup in customers signing up, but also a lot of big increase of post Nordnet in Shareville.
And we're going to continue to have to strengthen brand position with the marketing investment that we have announced. We have selected our brand agencies. We started working on a new brand concept, and the rollout of the new brand concept has been from H2. But we already stepped up on marketing spend in quarter 2, especially in Sweden, where we have more tactical marketing during quarter 2. And of course, a maintained focus on cost control and scalability overall.
So with that, I hand over to you, Marcus, for Q&A.
Great. Thank you, Lars-Ake. So now we'll open up for questions. [Operator Instructions] So let's start with Jacob Hesslevik from SEB.
My first question is on Slide 10. You have raised the 3-month before just since the last quarter, but still expect the liquidity portfolio to generate SEK 1.6 billion. Does this reflect the divestment of the unsecured portfolio? Or what is the reason you haven't raised the guidance?
No, it's not. Everything is as is until the deal is closed. So it's no change in unsecured lending. So the reason is that we have a slightly lower deposit compared to what we had in quarter 1. But on the other hand, we see higher than market rate past [indiscernible].
Okay. And then on Slide 32 and 33, you show the share of savings sold by cohort and asset type as well as the share of customers trading during the first quarter. So deposit is at 19% for the 2024 cohort, which is a record amount compared to earlier years, while number of trades amount an impressive 58%. So have you seen more inflows in the savings account in recently joined customers, which is just a timing aspect and that these new clients had time to build its portfolio yet?
Yes, of course. But the new customers coming in are normally trading more actively in the beginning. That's why you see also a high margin for new customers. But we also know that the majority of the increase on the savings account is also coming from external deposits, support, of course, the net savings go to savings accounts as well.
All right. And then on the unsecured portfolio, which you announced on Friday. Did you divest it at 101.5% of the lending book that would imply a price book of 11x or price earning of 29x? I'm sure I'm missing something here. So if you could help us better understand the pricing, it would be helpful.
Yes, the final pricing is, of course, at closing. But if you would have closed the portfolio end of March, that would give 101.5% versus the lending volume that was SEK 3.8 billion. So it's around, yes, what is SEK 50 million, SEK 60 million impact in PLM. But then, of course, you have transaction costs, and we need to write down goodwill. So the onetime effect on the P&L is slightly negative if you include goodwill.
But goodwill, as you know, also the write-down of that is not impacting capital base because it's already deducted. So -- and also going forward, there is not going to be any material impact on the P&L since we can reinvest the freed-up capital, SEK 3.8 billion in liquidity portfolio and also additional lending.
Yes. Because I guess the NII is going to come up somewhat and then you get rid of the loan losses as well. So I mean, in the long run, it should be slightly positive then as well, right?
Yes, I would say it's a give and take. So it's not going to be a -- it's going to be just minor effects on the P&L, both onetime and FX going forward. So the main benefit from this is that we free up SEK 350 million in the capital requirements. And of course, enables us to focus more on our core business.
Thank you. Next question comes from Ermin Kerric from Carnegie.
So maybe if we just start on the deposits as a percentage of savings capital as you show that's been trending downwards, and it's quite a bit lower than it's been historically. How confident are you that you should normalize given that we have a different rate environment currently?
Yes. But I think last quarter, and I see that stabilizing, especially in light of higher net savings. But then again, it's been record on net buy of fund. But we see a stabilization, and I would say it's more likely to have an upside on this than the downside.
Yes. I mean, my question was more how likely it is that you will see a recovery to the historical level? Or you think that this is sort of the new going with?
Yes, I mean that's, of course, very hard to tell. But we say is likely to have an upside from where we are today, how big that is. That's another question. I think that remains to be seen in the coming quarters, how this develops.
But again, I mean if you have a market event, a crash, for example, in some way, then we know that we have a very tough and big pickup on the passes. And that we, of course, need to be pre prepared for when we look at the leverage ratio.
Got it. And staying on the deposits as well. So in your assumption for the NII, you assume that you pass on [indiscernible] 100% on deposits. How confident are you that you could do that? And I suppose, especially in Sweden given the competitive environment?
Yes, of course, we need to look at the competition a bit here since you know the price sector is different outside of Sweden, where we more the price setter. But I think we're going to see a pretty fast pullback also on interest rates on savings account, especially for the ones where -- which have very high risks that we have and we are already 1 of the highest in the market today. But it depends on what competition do, especially our main competitor in Sweden.
Understood. Then the final question was just if you could talk a little bit more about Shareville and the customers that are active on Shareville, how they compare to the other customers in terms of trading, turnover, et cetera? .
Yes. But they are more active overall then, of course, was the hen-and-egg if the -- because they're actively signed up to Shareville. But clearly, they are more active and they are almost double amount of trades and trade value compared to a normal customer. But what we're happy to see now when we transferred or migrated the platform into our Nordnet app in Web. We also see pickup now in new customers signing up, which we didn't see on the old platform. So that's very nice.
Thank you. Next question comes from Nicolas McBeath at DNB.
Can you hear me?
We can.
Yes.
Great. It's working. So starting with a couple of questions on net inflows. So we saw quite nice increase in inflows in Q1, up almost 3x year-on-year. So what do you think accounts for the large inflow improvement we saw here in the quarter?
That's 2 factors. One, of course, is that they have a higher customer growth. And we knew, new customers normally also bring new money in. But also that we've seen good flows from all the segments, both from retail and private banking. And as we know, it was mainly private -- retail always stable. But private banking, as you know, especially part of last year, did big reallocations into other instruments like bonds and also paying back mortgage, et cetera. But that's stopped now. And we also see, I mean, private banking coming in and dipping in their toes into the market again.
Okay. Yes. So encouraging net savings trends overall. But if we look at the country split, we see it's below SEK 1 billion in Sweden in the quarter. Well, Avanza, for instance, they had over SEK 20 billion. What do you think Avanza has so much larger inflows than you in Sweden?
I mean we know you've been trailing Avanza when it comes to growth in Sweden for some time. But if anything, it seems that your underperformance seems to be widening versus Avanza. Is this a concern to you. Do you think -- or do you think it's more profitable to kind of continue to increase your focus on the other markets and leave Sweden to Avanza more and more?
Now of course, you're going to give Avanza a fight in Sweden. But as you know, we are very strong in the high-end segments in Sweden, so investor, traders and private banking. And we want to then broaden also our focus on to the savings segments, basically with the fund business and pension business.
But looking at Sweden, since we have the customer mix there, we will more high end, you see also a little bit more one-offs with from time to time, larger flows in either direction, so to say. But there were some larger flows out also during the quarter in Sweden. It hasn't impacted revenue, but it, of course, impacted that savings.
And we also see -- I mean, private banking still, I mean, now it's positive with flows, but still retailers pull the heaviest loads on net savings. And since we have less retailers in Sweden, that's probably the answer. But overall, a very, very good customer base in Sweden.
All right. And then a question on brokerage fee trade, which saw a quite nice increase in the quarter, up 16% versus Q4. Could you comment anything on what you see in terms of drivers for brokerage fee for trade from here? What do you think about the outlook and how the brokerage fee per trade, if you could say anything on the kind of involvement through the quarter? Did it increase like month by month? And maybe say something about where we are currently versus the average level in the quarter, that would be interesting if you could comment on that.
Yes. I mean the reason for the pickup in the brokerage fee income for trade is mainly that we have retail accounted for a larger share of the trades, the higher commission. But also then that we have higher share of cross-border trading, especially cross-border traded value that we saw in quarter 4.
I can't comment specifically how it's looking now. You foresee that over time. But there's been a strong development over the quarter, I would say. But it's a little bit more dependent, of course. I mean it's also based on a positive market sentiment, which is important.
Yes. Because I guess, you have 2 drivers. You have, first of all, the kind of structural driver that when you grow more outside of Sweden, those customers in Denmark, Finland, Norway trade, more cross-border, then you also have a cyclical components. But would you expect to see potential for net brokerage trade to continue to climb higher? Or do you think we're going to do for a normalization over the next few quarters with lower cross-border trades?
Yes. I think cross-border is probably going to be on a high level than if the value is going to be also high, if it's larger bids. But now we're seeing quite a pickup on the income per trade. So let's see how that plays out in the coming quarters. I don't want to project that it's just going to continue in a linear way by 4. that will be nice, of course. But I think we had a good pickup now. So let's see how this plays out in the coming quarters.
Next question comes from Michael Macnaughton at UBS.
Can you hear me?
Yes.
Yes.
Great. Yes. Just following on the net brokerage income per trade. Obviously, a decent amount of that is the higher cross-border, particularly in Sweden. That was quite a big increase. Can you say anything on how much of that is taken up by new customers in the quarter because we are seeing that's quite large as well or if it's across the next?
Now it's quite a bit across. And okay, Sweden had a pickup, but the main contribution to cross-border trading is [indiscernible] in London and Norway. And not least, Denmark had a very strong activity levels overall, both domestically, but also, of course, cross-border during the quarter.
Okay. Great. And then another one just on the leverage exposure. Obviously, deposits were down a little bit, but leverage exposure seem to continue to increase. Just wondering if there's anything we should be aware of there for what the drivers?
Do you want to comment on that, Lennart?
The deposits will increase by number of customers, of course, but not in the extent that we will jeopardize the leverage ratio or anything like that. We have plenty of room for that. And as I said, I mean, we can take on more than SEK 38 billion of new deposits before jeopardizing anything of the capital constraints with that. So we're very confident with it. .
Sorry. No, yes, the question was more, I guess, deposits were down Q-on-Q, but the leverage exposure continued to increase.
Oh, sorry. I missed that one. No, that was just a one-off because the month or quarter end was during a weekend and we had a lot of trades before that. So a lot of other comes into other assets and liquid transfers, legal funds and transfer, sorry.
Thank you. Next question comes from Rickard Strand at Nordea.
Can you hear me?
Yes.
So starting off with the net flows just coming back to the very strong net flows in, yes, basically Finland, Norway and Denmark. Is there any sort of one-offs or unusually strong seasonal patterns that we should keep in mind? Or is it just the effect of sort of strong customer acquisitions?
No, it's no big one-offs in those countries. There were some one-offs in Sweden in the wrong direction. But in the other countries, it's been normal those. Of course, partly due to that they have a strong market segment now as well driving customer growth, but also driving that savings. But also, like I said, a stabilization of reallocation in the private banking portfolios.
And coming back to Sweden there and the somewhat weaker trend there for net flow. Is it also bearing in mind your sort of ongoing or upcoming marketing activities? How should we see that playing out? Do you expect to see sort of a clear improvement throughout 2024? Is this expected to see the effects later on?
The main bulk of the marketing step-up is going to be in H2, where we have the new brand concept and we're going to roll it out in all the countries. But already in quarter 2, we stepped up tactical marketing in Sweden to push growth a little bit.
But again, that savings, I think I don't know how much of one-offs in Sweden were in the quarter, but I think we announced that in Feb. But it was quite large. You shouldn't look too much on the net savings in Sweden. There was some negative run-offs.
Okay. And then just a final one on the launch of the Livent product in Denmark. Is that still expected year-end '24? Has there been further delayed?
No, I'd say either year-end or beginning of next year. But we really push us or less account to make it this year. But it might be that we launch it beginning of next year. So according to what we said before.
Great. The next question comes from Panayiotis Ellinas at Morgan Stanley.
Just a clarification on the brokerage income per trade, which was across the market. But one that you specifically asked on Denmark, where you saw the smallest increase quarter-on-quarter despite the similar trends with strong growth in cross-border trade and by you. So is there anything specific there?
I don't know, Marcus, if you have any specifics on Denmark.
No, I don't think -- I mean Denmark has been very strong for things a pickup in Q2, and this continued to be pretty strong. So these trends were already fairly strong in Denmark. Finland, similar story.
Okay. And then on the marketing, I think you just mentioned, we should see a step-up in the second half, particularly Sweden. How do we reference that to the customer growth. Do we expect more back-end acceleration in customer growth?
Yes. So like I said, we have a little bit extra take push in marketing in Sweden in quarter 2. But from H2, we're going to have the new brand concept that we're going to roll out, of course, across all the markets. And this is to drive brand awareness and preference and ultimate customer growth. But of course, it will take time before you see the effects of push in brand awareness and general brand marketing.
Next question comes from Nicolas [indiscernible] at Exane.
Can you hear me?
Yes, we can.
Just have one. On the mortgage rate in Sweden, so with its rates, I know they have a different product and different indexation than you, but they did so even ahead of Central Bank doing anything. So I was wondering how do you see your own mortgage rate in Sweden? And how do you see your competitive positioning and competitive pressures there?
I mean, we have very good rates on the mortgage assets compared to the markets, and we don't see any real pressure with fairly stable development in mortgage in Sweden. And we don't see a need to lower and push volume further in this market.
The next question comes from Enrico Bolzoni from JPMorgan.
First one is can you just give some additional color on the strong customer growth in Denmark? Is it just driven by improving sentiment over the quarter or anything else? And then I also wanted to ask you, I'm referring to your Slide 35, where you give us the distribution of new customer by each core. Is this quite consistent across all the markets where you operate? Or in any specific market you see more younger people joining, for example? So that's my first question maybe.
I mean, I think the growth in Denmark, of course, partly sentiment, but also that we have an extremely strong position in Denmark with a clear. Number one, we've seen for a long time now about customer satisfaction by Net Promoter Score and brand awareness and brand preference really trending very well. So that's also part of the story.
When it comes to customer growth, I think it's fairly consistent. You always -- in all countries, you see spike at 18 and you can sign up for a new account, of course. You see a spike at 0 years as well, when the parents open account for you. And then I don't exactly the average age per country, but I assume, Marcus, it's about similar, perhaps a little bit older in Sweden since we have a little bit different customer in segment there.
That's mid-30s, I think.
Yes.
Okay. Another question was on your target of customer growth between 10% and 15%. It has been for a while now closer to the lower end. Is the expectation that it can go closer to the upper end once you have the new marketing activity and efforts fully rolled out or in a way that is independent so that could be on top once you are -- you're fully launched with a new marketing campaign?
No. Like I said when we announced the digital marketing, that the ambition with that is to push the customer growth up to the upper range of 10% to 15%. So you won't see another push on top of that, so to say. But it's going from the more 10% levels up to the higher end of that span.
And my final question was Slide 22, where you show your market share on different metrics. So there's a statistical where 18% of the population currently owns share. So I just wanted to understand where do you think the number can go? Do you think it can grow materially higher? Or actually over time, you will have more people owning funds as opposed to shares? I was just thinking about whether I can get some color from you on how you think it will evolve.
No. But I think it's been over time, it will increase, I think, in all our markets, a number of customers that own shares or equity. But that said, also, we continue to see strong fund growth in all the countries. But people get interested in funds and starts shaving as the impact of that. Part of those customers also get interested in equities overall and start buying direct shares.
Next question comes from Patrik Brattelius at ABG.
Just a couple of follow-up questions. So we start with this launch in Denmark. It's been slightly postponed compared to the original plan. Can you please share some more details what is postponed? Why is it postponed?
The Liberator manor?
Yes, yes, exactly.
I don't think it postponed. I think we said through that we're going to launch in the end of this year or beginning of next year. So -- but with aim of really launching it this year. So nothing has really changed, and we sent in the application now to set up the branch. We have the branch management in place. The project is well under its way.
So yes, I think we are on track, and we push as hard as we can. And of course, it's a very interesting product for us to launch is a large addressable market. And looking in that market with the pension business we have there, the back branch, which is a smaller part is also doing extremely well for the time being. So we have -- that's given us good expectations for the [indiscernible].
Okay. That is fair. I just had in my notes from last year that you had an ambition to launch in Q3. But yes, minor details. Given the divestments of this lending portfolio and the capital you are free up, can you please elaborate what you aim to use that capital for? Or should we think that this should be used for the buyback program?
I don't know if you want to comment that, Lennart. But still with the guidance on leverage ratio, that's still where we're going to have the limits. But of course, it at least helps a little bit on the normal capital requirement. But still, for the buyback program, the limitation is still going to be the leveretration.
Yes. As you can see now, we have a higher requirement in the risk-weighted capital requirement and the leverage ratio. Now it reduces to the leverage ratio level, and that's where we're going to be. We can always handle the risk weighted. The leverage ratio is the constraint. And both the cost of this deposit, that's also that is something that we don't control ourselves. So we have to have a greater buffer in that one. So it's not something that we want to take risk on. We're going to use it for lending, of course. And those are higher risk weight than liquidity portfolio, but still less than the unsecured lending.
Great. We have -- sometimes I have some written questions. This one, I think, for Lennart. So in liquidity portfolio, the rates coming down. Is there a possibility to perhaps increase the risk or adjust the investments to get a higher yield?
We don't prefer risk to stay in the liquidity portfolio, it should be rather risk-free. But of course, it makes room for risk-weighted assets. But no, that's not what we're going to aim to have it. We're quite prudent with what risk we take on in that portfolio. It's low credit risk and low liquidity risk and also low interest rate risk.
Now all those are main parts of our ambitions at all times. Yes, of course, we like it. And if we see an opportunity, where we see it's quite risk-free anyway, yes, then we can use. But it's not like high increasing the risk weight or risk appetite.
Thank you. And then one final question about cross-border trading. So is the income coming mainly from trades in the U.S.? Or is it more cross-Nordic trading?
I think the Nordnet share is, of course, from the U.S. and then partly in Germany and then also, of course, Nordics. But the U.S. is the largest share.
Okay, great. That was the last question for today. So thanks, everyone, for attending the presentation. Please visit our website nordnetab.com or reach out to me if you have any questions.
And before we go, I just want to remind everyone of our tech briefing, which is going to take place on May 14. So it's going to be an interesting afternoon, where we're going to zoom in on our tech journey and talk a bit about the benefits of cloud technology. So I really hope to see all of you there. Great. Thank you so much. Have a good day, and bye-bye.
Thank you.