Finansinspektionen has announced on Nordnet the so-called Pillar 2 guide for gross solvency of 0.9%, which provides a total requirement for a gross solvency ratio of 3.9%. The company’s long-term dividend policy of 70% remains unchanged, taking into account the gross solvency requirement.
In June 2021, a requirement was introduced for Swedish banks to have the so-called gross solvency ratio of at least 3 percent. Gross solvency is calculated as the bank’s Tier 1 capital in relation to its total assets. The requirement differs from existing capital requirements because it does not take into account the underlying risk of the bank’s exposures. In addition to the minimum requirement, Finansinspektionen has the opportunity to issue to banks a gross solvency guide, which in practice means a complement to the minimum requirement. Finansinspektionen has notified Nordnet of a 0.9% gross solvency guideline, which means that Nordnet should have a gross solvency ratio of more than 3.9%. In addition to the gross solvency requirement, Nordnet will also maintain an internal buffer. At the end of the second quarter, Nordnet had a gross solvency ratio of 4.3 percent.
“The gross solvency ratio is a static measure that does not reflect the underlying risks in a bank’s operations. The minimum requirement is 3 per cent. However, Finansinspektionen has the option to add individual supplements for each bank and , previously, stated that they expect the supplement In most cases, for Nordnet, Finansinspektionen has assessed that the supplement should be 0.9%, due to the business model in which customers themselves manage their assets. “To a large extent, in order to wait, for example, for what they consider to be a better market situation, deposits increase, which reduces our gross solvency ratio. Finansinspektionen has taken this type of potential move into account in its decision, ”says Lars-Åke Norling, CEO of Nordnet.
To further strengthen the capital base, Nordnet will issue Tier 1 capital in the form of the so-called AT1 bond. Details of the number will be provided later.
Finansinspektionen’s recommendation on restrictions on banks’ dividends expires on September 30, 2021. Nordnet’s dividend policy states that 70% of the profit must be paid to shareholders. To date, in 2021, Nordnet has distributed SEK 1.51 per share, which corresponds to approximately 32% of the profit.
“So far this year we have distributed just over 30 per cent of the profits for 2020 and the board now assesses that there is room for other dividends during the current fiscal year. The board will convene an extraordinary general meeting in November and will propose the general meeting to decide on additional dividends “Our long-term policy of distributing 70 percent of profits remains unchanged, of course taking into account the gross solvency requirement,” says Lars-Åke Norling, CEO of Nordnet .
This information is such that Nordnet is required to publish it in accordance with the EU Regulation on Market Abuse (EU No 596/2014). The information was sent, by the specified contact person, for publication 2021-09-24 18:00 CET.
For more information contact:
Johan Tidestad, head of communications
[email protected], 0708-875 775