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Hello, and welcome to the DNB Q1 Conference Call. Please note this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Mr. Rune Helland, to begin today's conference. Thank you.
Thank you very much, and hello, everyone, and welcome to DNB's analyst call for the first quarter. Around the table here in Oslo, we have in addition to Kjerstin and Ida, Maria Loevold from Personal Banking, Harald Serck-Hanssen, Large Corporate and also [indiscernible] from Norwegian Corporate. And of course, Alf Otterstad from DNB Market.
Before we open up for questions, Ida will give you the highlights for the quarter. So Ida.
Hello, and thank you, everyone, for listening in. The Norwegian economy continues to remain robust with good activity level in the first quarter. Moderate growth outlook, low unemployment levels at around 2%, and built-in stabilizers, which provides ample room to maneuver should there be need for that.
The Norwegian Central Bank has kept a key policy rate at 4.5%. The Central Bank is expected to cut the policy rate twice this year to end up at 4% by year-end. Looking at our results for the quarter. This is really a strong performance across the board and also shows very strong signs of high activity levels going up from the fourth quarter and continuing also in the first quarter.
We're well positioned for future fee-related income also now with the inclusion of Carnegie as of March. Return on equity came in at 15.9%. NII was down 1.8% from the fourth quarter, but up 5.7% from the first quarter 2024. NII is impacted by profitable growth both in loans and deposits, but was offset by 2 fewer interest rates in the quarter.
Net commission and fees was up 29.5% from the first quarter of 2024 driven, of course, among other things, by the inclusion of Carnegie, but also stand-alone taking Carnegie aside, we were up 15%, and it's a record high quarter in terms of commission and fees. We're seeing a strong development across the product areas, but I would in particular point to IBD, asset management and a very good activity level we saw in the real estate broking area, which also supports the loan growth that we saw in personal customers.
On the loan growth side, we saw an uptick of 0.5% currency adjusted negative 0.3%, if we don't adjust for the currency, and it's predominantly in the large corporate area where you see an effect from the FX. Underlying strong growth in personal customers of up 0.8% in small and medium-sized enterprises, up 0.5%. And in that area, I think it's important also to bear in mind that we still haven't seen an uptick in activity level or growth in real estate in the new builds of real estate or in the construction industry.
So it's actually across the board in the small and medium-sized enterprises beyond entrepreneurs and new builds that is contributing strongly. Large corporates, fairly stable in terms of volumes. But as you can see in the strong development in investment banking, we're also seeing a good activity level in the large corporate area.
There is a robust and well-diversified portfolio across industries and geographies, 99.3% of our portfolio is in Stage 1 and 2, and we take impairment provisions of NOK 410 million in the quarter. The capital position remains to be robust, also taking into account that we've now deducted for the acquisition of Carnegie, consuming 120 basis points. The core Tier 1 capital ratio is now at 18.5% ample room to maneuver and could uphold our dividend policy as well as support our customers also in the times ahead.
The general assembly gave the Board of Directors an authorization to buy back up to 3.5% of outstanding shares. And what we've told today is that we are expecting to send an application of up to 1% buybacks -- of up to 1% of outstanding shares in buybacks and we will come back to you when we receive approval for that later on.
And with that, we open up for questions.
[Operator Instructions] Our first question comes from the line of Gulnara Saitkulova from Morgan Stanley.
So the first question is on tariffs. Given the recent escalation in the global trade tensions and tariff uncertainty, particularly affecting the sectors like energy and shipping. How exposed is DNB relative to its Nordic peers? Could you elaborate how Norway's trade profile amplifies or decreases DNB's risks compared to Swedish or Finnish banks?
And the second question also related to client sentiment. How are your corporate clients reacting to the renewed trade tariff risks and geopolitical tensions particularly in those expertise industries like energy, seafood and shipping? And are you observing any shifts in investment appetite, hedging activity or credit demand as a result?
Thank you so much for your questions. I'll try and address the first 1 and leave the second 1 to Harald. But first of all, in view of your question related to risk exposure to shipping and energy. These are portfolios that we have substantially reduced over the past 5 to 7 years. So we have a very limited and low risk exposure to the shipping industry below 2% of the exposure, oil and offshore overall has also been substantially reduced and is now at...
2.9%.
2.9% of the portfolio. Now overall, I think with regards to Norway, it's important to point out that Europe is a much more important trading partner for Norway than the U.S. The export to U.S. is limited to 8% of the total export. Whereas close to 70% of our export goes to Europe. So there is a very limited impact, I would say, by the 10% tariffs that have been announced so far. And the main trading good is related to seafood that has also previous experience with changing requirements, where we've been seeing that they have been able to find alternative markets.
Now back to shipping. I think it depends on whether this will be positive and negative with regards to which sector you are looking at. More notably, the most visible effect is obviously related to containers, where we have a very limited exposure, and we're comfortable with the exposure we have with regards to the longer-term effect, it's still uncertain whether this will lead to lower trade volumes, which could be negative for shipping or in fact, also is increased conflict and changed trading routes would lead to increased ton miles and actually increased activity in the shipping industry.
So I think it's still early to say whether this would be a net positive or a net negative for shipping. We are confident that Norway will still grow, as Ida mentioned, growth prospects of 1.5% this year. And despite the fact that Norway is an open and small economy, there is a very strong resilience in the economy that's built in stabilizers to maneuver even in times of higher uncertainty.
I'll pass it on to Harald and maybe you also can comment on shipping in a few.
Yes. I think you covered it well. Just a couple of details, 99% of our shipping portfolio is now low and medium risk. It's not normal for shipping to be a low-risk business. But after 4, 5 very strong years. It's a robust portfolio. We have around 100 clients that wee deem to be the 100 best shipping companies in the world, basically, we rely very heavily on non-lending income through the operation with the investment banking side.
We've reduced shipping portfolio substantially, but maintain the income by shifting to become more total provider of financing. I'd also like to emphasize that yard capacity is limited. So the supply side looks good with the exception of containers, where we have a very low exposure. Ship values are holding up well, partly because there is a lot of liquidity among the shipping companies and because it's difficult to find capacity, as I said on the shipyard side.
When it comes to your other question regarding the activity level, I would say, it's a little bit difficult to say, because the first quarter is normally a fairly slow and whether it's been reinforced by the uncertainty, it's difficult to say. I came back recently from the U.S. meeting some of the big funds, they are on the line. And I got the impression that some projects are being put on the back burner, awaiting clarification on tariffs and regulatory regime.
I also saw a noticeable increased interest from some of the investors I met looking at opportunities in Europe in general. And I would say Nordics specifically, which, of course, provides interesting opportunities for us as a Nordic bank.
The next question comes from line of Shrey Srivastava from Citigroup.
I have 2, please. The first 1 is on the Carnegie acquisition. What has your sort of client retention rate look like following the merger and what feedback have you received from clients after this was completed?
And secondly, in relation to the proposal for a further buyback up to 1% share capital, how do you view your capital distribution strategy going forward, trading at 1.5x book value. What is the logic for buybacks versus dividends at this current time?
I'll answer the second 1 and leave the first 1 to Alex. But I think, first and foremost, we see buybacks as an integrated part of our dividend strategy and capital allocation over time and still believe that we are far from a valuation or levels that would lead to us considering not to buy it because of too high a price.
So our dividend policy is very clear. It has been, and we've delivered consistently for many years with a cash dividend of more than 50% of the results per year and an increasing payout nominally per share per year. And then we used the buyback as a more flexible tool to optimize around the desired capital level.
And in addition, obviously, priority #1 is to reinvest in the business, and we remain comfortable that we have ample capability and capacity to support our clients and at the same time, still deliver on our dividend policy. And I think, the information about pending an application this week for an additional share buyback is a testament to that.
Thank you, Kjerstin, and answering the question on the client retention, I think the short answer is really no, turnover in many ways. If I were to go into the client feedback or probably try and segment it between different client groups, I think in by the banking to comment on the wealth management side, clients seems very appreciative that they will have access to a broader product portfolio and sort of be able to deepen the relationship with the Carnegie Private Banking.
On the investment banking side, the feedback is very much the same. DNB and Carnegie are very complementary in the position in terms of products and geographies. So the apologies that they will receive a stronger product overall and that objective, we will become the market leader in several categories in the Nordic region.
And lastly, on the security side being equity sales and trading equity research and fixed income sales and research. And I think client appreciate consolidation because they do comment that quality has been somewhat spread out amongst the providers and consolidating that quality on sort of fewer players in their self-interest.
The next question comes from the line of Sofie Peterzens from JPMorgan.
So just going back to the share buyback. The 1%, how quickly should we expect that to be executed in and the 3.5% approval that you got from the AGM. Should we expect that to be pretty utilized against 2025 earnings?
And then my second question would be on kind of the fee they were very strong also underlying, does the fees include anything that you would say is a little bit more temporary in nature or a little bit like more one-off or anything that could reverse in the second quarter, second half of the year? And then lastly, could you give an update or say if there is any update with your stake in Luminor and what your plans here are?
So I'll start with the last one. No, there is no new update in terms of Luminor. If we start with the timing of potential share buybacks, of course, this is dependent on when we receive an approval from the NFSA. So that is really not in our hands and not really something I can speculate on. But my understanding is that usually take between 4 to 6 weeks. But again, that's not something that we can control. So that's the timing issue.
We're thinking about 1% in connection with 3.5%, I think it's important to say that we are doing this in a similar way that we have done in the past few years, laying, mainly splitting it into smaller pieces also due to the fact that it provides us with the flexibility and also due to the fact that when we announced the new program is being deducted from the core Tier 1 capital ratio immediately. So we expect to do the same this year, if we still remain to have room to do share buybacks after these 1% going forward.
When looking at the fee base, we have a very strong momentum and a strong activity level. And as we pointed to, Investment Banking delivers a very strong set of results across the board. We had high activity on both high-yield bonds, but also investment-grade bonds as well as M&A. I think, if you -- if we start there, one of the areas that we expect has slowed down also due to the turbulence is the IPO market or the equity capital markets.
Apart from that, I think we still see a momentum. The markets are still open. But again, I think it's important to look at this also from what's happening around us. We had a good activity level in the first quarter in investment banking, both from Carnegie and from DNB and then the investments or on the asset management side, there was also a strong development in terms of the underlying activity.
But on the other hand, that, of course, assets under management is impacted by the value and the development that we see in the share market overall. And of course, some turbulence also means that some of our retail customers are taking out funds from their -- from mutual funds and setting it on account. But also what we're seeing is that customers are now reinvesting that into mutual funds again. So I think those are the 2 main areas of driving fees and commissions also in the years ahead. And some of that will be an element of activity overall in the market, but some of it will also be more resilient bearing in mind that we are growing our wealth management and not the least pensions.
[Operator Instructions] The next question comes from the line of Riccardo Rovere from Mediobanca.
3, if I may. The first 1 is on NII. When I look at your fact book, and I am making reference to table 1.2.1. In Q1, I noticed that the NII in personal customers is up significant -- well, kind of significantly that related to loans, but falls even more significantly on the parts.
And then also I note that in the very last line of the table, what you call other, the NII forced by kind of NOK 450 million or so. And this seems to have happened exactly the same in Q1 '24 with different magnitude, but more or less in the same. Would you be able to explain what's going on, especially in the personal customer side because the rate remained slightly stable. So I would suppose, I mean nothing major should have happened on the margin side and the movement in volumes cannot certainly explain movements by 10% up or down in a quarter. And then this other thing, which is down NOK 500 million in the quarter, what's that, if you can explain?
And then the second question I have is on Poland. I read there were some provisions related to Poland. Can you shed some more light on level of coverage or anything like that on the legacy portfolio in Poland? And last, I wanted to ask about, if you can shed some light on synthetic securitizations, if you have been using them, how much if you see a room to make a bet -- a more extensive use of this instrument to optimize the capital allocation?
Thank you for your questions, Riccardo, I'll answer the first one, and Ida can take this 2 other ones. I think just simply NII, it is a factor of fluctuations in the money market rate. That is the reference rate that we are measuring the activity in personal customers towards.
And the reason why there are bigger movements in personal customers compared to the others is that both large corporate and Corporate Banking Norway have margin-based loans and do not have the same volatility related to nonmarket rate. With regards to other, that is the bucket with several elements into it, amongst other treasury revenue and also reflecting activity in the repo market, we are -- the first quarter was a very active markets for us.
In terms of Poland -- sorry, Riccardo.
If I may just follow-up on this. On the other, I understand the personal customer makes sense to me. On the other bit it exactly happened the same thing in Q1 '24 and Q4 '23, and then in Q2 '24, it went up again by NOK 500 million. I mean, I know you are reluctant to give any kind of guidance, but it seems to me that here -- is it fair to assume that in 2025 should not be or relatively different than what we've seen in 2024. On that line because it falls and then it jumps back and that stays flat and then falls again and jumps, maybe we'll jump on...
Yes. But I think one of the reasons why we are a bit reluctant is that there are also other elements that impact other. But if we are looking at retail and treasury, there are positioning towards the end of the year where many banks are reluctant to sit on a lot of deposits because that triggers regulatory cost.
So there is quite a lot of balance sheet management, we should call it, in the market around year-end. So if we isolate it to that element, that is one of the reasons why we tend to see the movement that you are describing, whether there could be other elements impacting it in future quarters that would change it. I think it's difficult for us to say. But there is certainly a history of volatility what just tends to change in the way you described it over a year and between fourth quarter and first quarter.
When it comes -- did you get a response there, Riccardo?
Yes, yes, yes. That's okay.
When it comes to Poland, you are right in we have taken somewhat more impairment related to the legacy portfolio in Poland. There is no change really in terms of either customer activity or in the underlying risk in that portfolio, but more a reflection of the fact that we follow this very closely. We follow the development and are taking the reserves or impairments related to what we think is the best estimate at any given time.
So there is no change apart from that needs to be commented upon. When it comes to securitization, as you know that we did the -- we had a test, I would say, in terms of trying out securitization as a tool, as a capital optimizing tool last year. And we've said that we would like to continue looking at this also as a tool to manage capital in a best possible way also going forward. And we'll continue to do that going forward. But apart from that, we haven't announced anything.
Okay. Just 1 more quick follow-up on Poland, did you be able to share with us what's been amount of provisions that you charge related to Poland in the quarter.
I don't think that we have announced that, no. But again, it's not very material. If you look at the overall picture, we're taking impairments of NOK 410 million in the quarter. Some of that stems from Poland, some of that stems from customer-specific situations.
All right. Okay. So Poland is not the majority of the amount of provisions that you have taken this quarter? That's not the case?
We have not shared further details.
Our next question comes from the line of Jan Erik Gjerland from ABG.
It's Jan Erik Gjerland from ABG. 2 from my side, a follow-up on the NII. It looks like your long-term funding cost has sort of increased Q-on-Q. Is it sort of this particular margin increase you have seen in this quarter versus previous years? Has the spread widening made your funding being more expensive?
And secondly, on the benefit from the Sbanken Banking portfolio. Could you shed some light into what your expectations were ahead of the implementation of the IRB model into the second quarter? And what the outcome was versus this year or 3, which was from 20 basis points. So was 20 basis points of expectations of Sbanken initially? Or was that higher the capital benefits you have been gaining from Sbanken over time?
If we start with the funding cost, that's purely an element of the fact that we have higher volumes. And therefore, funding cost increases based on that has got nothing to do with spreads or funding costs overall in terms of -- for the bank. I would say, on the opposite, we are one of the best rated banks in the world and benefit from a very good and sound funding overall.
And when looking at Sbanken, you're right in saying that we have received approval for moving Sbanken from standard approach to IRB. That will be done in the second quarter and we're doing it alongside with the implementation of CRR 3. When we're looking at the actual effects of moving Sbanken into IRB, you need to think about 2 things, when comparing it to what we announced in connection with the acquisition of Sbanken.
First of all, some of the portfolio has already been moved over to IRB due to the fact that every time a customer refinancing its loan in the Sbanken portfolio once it was transferred over to the technological platform of DNB. That meant that it was actually automatically been integrated into IRB. So we've already taken some advantage of IRB in the Sbanken portfolio by just refinancing that portfolio, which is a portfolio that refinances quicker than the standard D&B portfolio.
The other element you need to think about when looking at the effects of moving into IRB is that with CRR3, the benefit of being IRB has decreased. So you have a positive effect purely on just by CRR3 being implemented even if it was the standard models. And then we have a small positive element on top of that, making it IRB.
But again, I would say it's very minor in connection to -- or when comparing it to what it was before we had CRR3. So we haven't really quantified the effects or split it, but we're now combining it to say that actually. Overall, the Sbanken capital relief that we expected from moving into IRB is now taken out and we are also seeing neutral effect from CRR3 in combined with the transfer of Sbanken over to IRB.
Very good. And can I just have a follow-up. It looks like also the risk weight changes from '20 to '25, as given you a lower impact than you previously thought. Is that a case you have sort of taken on more risk on your current new lending in mortgages?
No, definitely not. This is more a reflection of the fact that we are looking at a different part of the portfolio and also adding more of the personal customer portfolio over to IRB.
Okay. Can I have 1 more? Can you have -- do you -- have you seen any changes to the customer behavior in the asset management part of Carnegie after you took charge?
No. We have not seen any change in behavior in the Carnegie portfolio. Typically they have more institutional, more professional some investors overall, where we have seen changed behaviors towards end of the first quarter and coming into the second quarter is that some retail customers has decided to exit their parts or all of their investment into a mutual fund.
It is however a limited number that the vast majority more than 95% has stayed with their savings strategy. And it has been interesting to note that from how we see the information. It looks like those who have more experience, have had savings in the markets for a longer time. And those who have been in contact with us or have received advice in some way have been more resilient in staying in the market in these more turbulent times, whereas the new digital favors in more index related products have been the less stickier part. But again, markets have normalized, and we have also seen slow coming back in recent weeks. So it's not very big movement that we're talking about.
The next question comes from the line of Herman Zahl from Pareto Securities.
Just a question on NII. The amortization effect, seem to increase over quarter-on-quarter as we expect it to reverse from the Q4 highs or what we saw as a Q4 high. But could you just discuss the current level there? And any seasonal effects, we should be aware of?
Well, you're right in that. We had a strong activity level in the fourth quarter. And I would say, if you look at it from a seasonal perspective, we were expecting that to decrease in the first quarter.
On the other hand, as you can see from the strong development in markets and investment banking as well as the low volumes that we're seeing in large corporates. If you take that in connection, that also means that there's been a strong underlying activity in terms of financing or refinancing activities. When we have more refinancings than what we have anticipated, that also means that you have more amortization effects related to NII. And therefore, you see an uptick in this quarter from a very strong fourth quarter results.
Okay. And then just shortly on deposit margins down 10 basis points or so, somewhat more than LIBOR movement that's some margin erosion there. But just given the sort of interest rate sentiment, how that shifted during the quarter and we didn't have a rate cut after all in March. Did you see any change in the positive behavior during the quarter or into Q2. Could you discuss that a bit as they try to that for long growth?
No major shifts in behavior from depositors. It's a combination of factors impacting the margin. One that you were saying it was a decrease in money market rates for one. There is some continued behavior of moving deposits from typical transactional operational accounts into more savings and investments accounts.
And #3, we had attractive growth in the quarter and a substantial part of that growth stems from organizations, which are attractive, but lower yielding, lower margins than the average portfolio overall and thus impacting the overall margin level for the book. Those 3, but no big shift as to the switch amongst products, it's rather a behavior that is tapering leveling off compared to what we've seen in previous quarters.
[Operator Instructions]. We have a follow-up question from Riccardo Rovere from Mediobanca.
If you had to assess at what level is the integration of Carnegie into DNB. Could you say this is almost done, almost completed and in that strong. So how much of your time is -- has been devoted to integrating Carnegie and to exploring new ways of increasing capital-light operations. This is my question.
And the second 1 is more of a curiosity, actually. But why only 1% buyback, while not bringing down to 0. Why just not giving it up. What's the point of only 1%?
Thank you, Riccardo. I will start on the first 1 and hand it over to Alex, and I think, Ida partly answered the buyback question on Sofie's question, but I'm sure she'll be happy to repeat it. As announced today on the press conference, the legal close of Carnegie took place in March and next week, we will be officially launching the merged new investment bank, DNB Carnegie, which is the merger of equal, when it comes to investment banking activity, and that forms the foundation for a Nordic powerhouse across investment banking and wealth management.
And for some, it's been a deadline to reach the official launch of day 1, but I know Alex will also say that in some way, it really feels that it's now it is beginning. However, with regards to my time being spent, I think the works up to here to a large part as well. And from here really is up to the people working with and talking to our customers on a daily basis. And that is where the work will need to be done, and we are very optimistic about the outlook and the opportunities that's merging and changing a business always comes with its challenges, but I'm very confident that Alex, Harald and Hakon are well prepared for that.
With regards to my time and whether you're referring to organic versus structural opportunities. I again reiterate that we are primarily focusing on organic growth. This is also the case and has been for developing capital-light revenue, which we have done quite successfully over the years. Now there will be a substantial uplift with Carnegie, as you've seen only from including March in today's numbers for this quarter.
And we have upped our ambition for a more than 9% growth in fees and commissions from here. So mobilizing the organization, delivering on strategic ambitions, where a strengthened Nordic platform and executing on the strength in Nordic platform as well as the businesses across the group, that is the primarily goal and what we spend the most of our time on, including me. But Alex, maybe you can develop on how far we have come?
Thanks, Kjerstin. As you say, this is very much a gradual process. And in many ways, it's been rolling on since the announcement. Next week, we will have a common brand and common operations within the 2 business areas that -- where we sort of overlap and that's within Securities Research and Broking and within investment banking.
And as you said, Kjerstin, it's more getting to the starting point. In many ways, but we will have gotten our ways of the integration into those 2 areas by next week. But then the sort of true process is more. It will take 18 to 24 months to realize from sort of where we are today. With the gradual integration. And so far, I believe it's going if anything, marginally better than expected.
Good. And when it comes to share buyback, as I think you remember as well Riccardo, approximately 2 years ago, we changed process, whereby it meant that as soon as we receive an approval from the NFSA, and we launched a program, that means that it's being deducted from the core Tier 1 capital ratio.
At that point, we also decided to split it into smaller pieces and do it rather than sending applications more frequently and then launch the programs more frequently and utilize it that way. And that's the similar way that we're approaching it this year and we also believe that to be the best way barring in mind that we want to continue utilizing share buybacks as a tool to optimize the capital positions, but also being aware of the fact that there is an increased uncertainty in the world around that. And therefore, we also want to show that we are managing this in a very prudent and responsible way.
Okay. Are there any liquidity constraints on the buyback?
No.
No. Okay.
We have a following question from Jan Erik Gjerland from ABG.
It's Jan Erik Gjerland from ABG again. Just a follow-up on the lending side. Firstly, you said that it was quite flat on large corporate, FX adjusted in the quarter. And last quarter, it sounded like it was more a jump in the corporate lending -- large corporate lending because you had some bigger changes in your book it sounded like it was more of a shorter-term financing. So the volume of NOK 491 billion you have in the large corporate average today, is that sort of a new level to stay? Or is that something you think would churn off as we go with during this year?
Secondly, on the personal customers, it seems like the average level is still sort of growing in the right direction but not as fast. What have you seen towards the end of the quarter? Have you seen the interest rates starting to bite for the new lending side or new refinancing side versus what your previous expectations have been?
Thank you, Jan Erik. I think, you know our strategy and our operations quite well in the large corporate side, and this should not be seen as a new level. I think you have seen over time that we are both growing the book steadily and consistently, if you look at a longer-term basis. But indeed, it may vary from quarter-to-quarter in view of the fact that this is a book with a very high turnover, turnover of the capital of less than 2 years. So that gives you an indication of the magnitude of business that needs to be done on an annual basis.
So this looks to continue to grow. And these are large transactions, transactions where we are also on occasions underwrite, syndicate, sell to the market, we do bridge to bond transactions and we do more traditional financing and revolving credits, that are also drawn from part of them on a seasonal basis. So I think nothing else should be read into the third or fourth quarter numbers other than the fact that they were very active forces, where we closed a lot of transactions.
And during the course of the year 2024, we also took on a large number of new customers that we have commented upon. So focus on the first quarter, which is seasonally not typically a quarter where there is a lot of growth because books have closed for year end and it takes some weeks to start-off and our focus is also very much broaden these relationships and focus on build on cross-selling.
But consistently, the book on large corp has also grown alongside and they have contributed to the 3% to 4% growth we are looking for the group as a whole on an annual basis, and we expect that to be the case also in the future. With regards to your second question, I kind of missed which area you were asking in?
The mortgage book, have you seen any changes to the mortgage willingness to take on new mortgages towards the end of the quarter and into the more uncertainty on the interest rate side?
Now the short answer to that is no. We have, as announced earlier today, a record high inventory going into the second quarter with a 30% increase in number of financing certificate, very fresh reports from our real estate brokerage that the activity level in the market continues to stay very high.
So we have not seen this in the housing market. We have also not seen it in consumption with regards to the information and data we can read from the use of cards and payments transaction. And this is typically an area where you would expect maybe to see it somewhat sooner, but that has not been seen. I think an area that provides comfort as well is also the wage growth, where just another year, we expect most Norwegians to have an increase in their disposable income with a wage growth of 4.4%, 4.5%. So we still expect consumption to be a driver for increased economic activity this year compared to last.
There are no further questions. So handing back over to you, host, to conclude today's call.
Very good. Thank you so much for your participation and good questions. We here from Oslo would like to wish you a good rest of the day. Thank you so much.