Sp Mortgage Bank Plc: Financial Supervisory Authority’s decision regarding discretionary additional capital requirement to The Savings Banks Amalgamation

Sp Mortgage Bank Plc
Stock Exchange Release
5.7.2019 at 15.00

Board of Financial Supervisory Authority has set a discretionary additional capital requirement according to the Act on Credit Institutions’ chapter 11 6th article in their meeting on 4th of July 2019. Financial Supervisory Authority has determined the discretionary additional capital requirement as 1,25 % of total risk amount according to the Act on Credit Institutions’ chapter 11 6th article’s 2 moment’s first paragraph’s a) subparagraph. The requirement percentage is based on the methodology of SREP (Supervisory Review and Evaluation Process) for LSI Industries banks from ECB, where the percentage of additional capital requirement is determined from the overall rating of FSA’s assessment. Additional capital requirement is to be fulfilled by Common Equity Tier 1 (CET1) capital referred in EU’s Capital Requirement Regulation (CRR) (EU 575/2013). The capital requirement ruling the Savings Banks Amalgamation is valid until further notice from 31st of March 2020, however maximum until 31st of March 2023.

At the end of 2018, the Savings Banks Amalgamation had a strong capital structure, consisting primarily of CET1 capital. Total own funds were EUR 978.0 million (984.6), of which CET1 capital accounted for EUR 948.2 million (939.1). The growth in CET1 capital was due to the profit for the period. The Savings Banks Amalgamation does not have additional Tier 1 capital. Tier 2 (T2) capital accounted for EUR 29.7 million (45.5), which consisted of debentures in the financial year. Risk-weighted assets amounted to EUR 5 385.6 million (5 165.7), i.e., they were 4.3 % higher than at the end of the previous year. The most significant change related to the increase in risk-weighted assets was the growth in the mortgage portfolio. The capital ratio of the Savings Banks Amalgamation was 18.2 % (19.1) and the CET1 capital ratio was 17.6 % (18.2).

SAVINGS BANKS GROUP

Further information:
Tomi Närhinen, Managing Director, Saving Banks’ Union Coop
tomi.narhinen@saastopankki.fi

Sp Mortgage Bank is part of the Savings Banks Group and the Savings Banks Amalgamation. The role of Sp Mortgage Bank is, together with Central Bank of Savings Banks Finland Plc, to be responsible for obtaining funding for the Savings Banks Group from money and capital markets. Sp Mortgage Bank is responsible for the Savings Banks Group's mortgage-secured funding by issuing covered bonds.

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