Update on BankNordik’s forthcoming capital requirements

Company announcement

Announcement no. 25/2018

Update on BankNordik’s forthcoming capital requirements

On June 25 2018, the Minister for Industry, Business and Financial affairs announced an increase in the systemic risk buffer related to domestic Faroese exposures from 1% to 2% as of 1 January 2019 and to 3% as of 1 January 2020 based on a recommendation from the The Systemic Risk Council in April 2018. Read the announcement (in Danish).

Given that approximately 60% of BankNordik’s exposures are domestic, the fully phased-in systemic risk buffer of 3% will weigh around 1.8% of the Group’s total exposures.

On 27 June 2018, the Danish FSA published a set of preliminary principles for the MREL add-on related to Faroese institutions. With regards to Faroese SIFI-institutions, including BankNordik, the FSA expects to exclude the systemic risk buffer related to domestic Faroese exposures and the countercyclical buffer in applying the MREL add-on for these institutions. The MREL requirements for Faroese institutions will be phased-in during the period 2020-2025. Read the announcement (in Danish).

These statements provide a clearer picture of the Group’s future capital requirements and do not prompt a change in the capital ratio targets. BankNordik therefore reconfirms its CET1 ratio target of 17% and its total capital ratio target of 20%, which are fulfilled as of 31 March 2018 when accounting for the net profit made in the first quarter of 2018.

For additional information, please contact:

Árni Ellefsen, CEO, tel. (+298) 230 348

BankNordik has banking activities in Denmark, Greenland and the Faroe Islands and insurance activities in the Faroe Islands. Founded in the Faroe Islands more than a century ago, the Group has total assets of DKK 16.3bn and 387 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.