MyBank to increase risk-weights on its loan portfolio after recent decision by regulatory authorities
MyBank increases the risk-weighting of its loan portfolio from 75% utilized today to 100%. MyBank’s decision follows a change in practice from the Financial Supervisory Authority of Norway (Finanstilsynet), which now states that all new banks will be required to maintain 100% risk-weighting on loan portfolios for the first three years of operations.
MyBank adopted mass market weighting of its loan portfolio in Q3 2018, following a decision by the company’s Board of Directors. The adoption followed Norwegian capital adequacy regulations (Kapitalkravforskriften §5-8) and the conditions outlined in MyBank’s banking license. As a result, risk-weighting of 75% was reflected in the bank’s Q3 2018 report.
Starting in Q4 2018, MyBank will revert to 100% risk weighting of its loan portfolio, which will result in reduced capital adequacy ratios.
MyBank reported RWA of NOK 548m and CET-1 capital of 163m in Q3 2018 by applying 75 % risk weight on its loan portfolio, which corresponded to a CET-1 ratio of 29.8 %. By applying 100 % risk weight on the Q3 2018 loan portfolio, the RWA increases to NOK 672m, corresponding to a CET-1 ratio of 24.3 %.
For further information, contact: Christen Fredriksen, CEO Tel: +47 48 04 86 66 E-mail: christen.fredriksen [at] mybank.no