2014 EU-wide Stress Test Summary for SE - Nordea Bank AB (publ)
Core Information
- Bank Name: SE - Nordea Bank AB (publ)
- LEI Code: 6SCPQ280AIY8EP3XFW53
- Reporting Period: 2013 - 2016
- Stress Test Scenarios: Adverse Scenario and Baseline Scenario
Summary of Adverse Scenario
| Metric |
2013 (as of 31 December) |
2016 (as of 31 December) |
| Operating profit before impairments |
4,489 (mIn EUR) |
5,938 (mIn EUR) |
| Impairment losses on financial and non-financial assets in the banking book |
711 (mIn EUR) |
7,838 (mIn EUR) |
| Common Equity Tier 1 capital (CET1) |
22,244 (mIn EUR) |
20,875 (mIn EUR) |
| Total Risk Exposure |
163,722 (mIn EUR) |
173,515 (mIn EUR) |
| CET1 Ratio |
13.6% |
12.0% |
- CET1 Threshold (EU-wide): 5.5%
- Common EU-wide CET1 Threshold (in EUR): 9,543 (mIn EUR)
- Mandatory Conversion Instruments: 0 (cumulative conversions not considered for CET1 computation)
- Additional Tier 1 and Tier 2 instruments eligible for conversion: 0 (excluding those with mandatory conversion)
Summary of Baseline Scenario
| Metric |
2013 (as of 31 December) |
2016 (as of 31 December) |
| Operating profit before impairments |
4,489 (mIn EUR) |
10,018 (mIn EUR) |
| Impairment losses on financial and non-financial assets in the banking book |
711 (mIn EUR) |
2,271 (mIn EUR) |
| Common Equity Tier 1 capital (CET1) |
22,244 (mIn EUR) |
25,016 (mIn EUR) |
| Total Risk Exposure |
163,722 (mIn EUR) |
164,134 (mIn EUR) |
| CET1 Ratio |
13.6% |
15.2% |
- CET1 Threshold (EU-wide): 8.0%
- Common EU-wide CET1 Threshold (in EUR): 13,131 (mIn EUR)
- Additional Tier 1 and Tier 2 instruments eligible for conversion: 0
Risk Exposure Breakdown (as of 31 December 2013)
| Category |
LTV % |
Exposure Values (F-IRB) |
Exposure Values (A-IRB) |
Exposure Values (STA) |
Risk Exposure Amounts (F-IRB) |
Risk Exposure Amounts (A-IRB) |
Risk Exposure Amounts (STA) |
Value Adjustments and Provisions (F-IRB) |
Value Adjustments and Provisions (A-IRB) |
Value Adjustments and Provisions (STA) |
| Central banks and central governments |
0 |
0 |
0 |
84,049 |
0 |
0 |
598 |
0 |
0 |
0 |
| Institutions |
41,093 |
0 |
0 |
4,442 |
9,244 |
0 |
642 |
0 |
0 |
0 |
| Corporates |
160,778 |
0 |
0 |
3,789 |
83,619 |
0 |
355 |
0 |
0 |
0 |
| Corporates - Specialised Lending |
1,268 |
0 |
0 |
302 |
951 |
0 |
0 |
0 |
0 |
0 |
| Corporates - SME |
49,483 |
0 |
0 |
7 |
23,504 |
0 |
44 |
0 |
0 |
0 |
| Retail |
0 |
0 |
0 |
15,280 |
0 |
0 |
10,693 |
0 |
0 |
0 |
| Retail - Secured on real estate property |
63.7% |
0 |
0 |
132,332 |
0 |
0 |
9,090 |
0 |
0 |
0 |
| Retail - Secured on real estate property - SME |
34.9% |
0 |
0 |
1,455 |
0 |
0 |
529 |
0 |
0 |
0 |
| Retail - Secured on real estate property - non-SME |
64.1% |
0 |
0 |
130,878 |
0 |
0 |
302 |
0 |
0 |
0 |
| Retail - Other Retail |
0 |
0 |
0 |
24,863 |
0 |
0 |
5,467 |
0 |
0 |
0 |
| Retail - Other Retail - SME |
0 |
0 |
0 |
1,362 |
0 |
0 |
529 |
0 |
0 |
0 |
| Retail - Other Retail - non-SME |
0 |
0 |
0 |
23,501 |
0 |
0 |
5,467 |
0 |
0 |
0 |
| Equity |
0 |
0 |
0 |
858 |
0 |
0 |
3,145 |
0 |
0 |
0 |
| Securitisation |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Other non-credit obligation assets |
1,528 |
0 |
0 |
1,832 |
0 |
0 |
702 |
0 |
0 |
0 |
| TOTAL |
203,399 |
6,114 |
157,195 |
110,250 |
94,380 |
5 |
15,324 |
19,570 |
448 |
355 |
Impairment Rates and Provisions (Baseline Scenario)
| Year |
Impairment Rate |
Stock of Provisions |
Coverage Ratio - Default Stock |
| 2014 |
0.00% |
0 |
0.00% |
| 2015 |
0.00% |
0 |
0.00% |
| 2016 |
0.00% |
0 |
0.00% |
Impairment Rates and Provisions (Adverse Scenario)
| Year |
Impairment Rate |
Stock of Provisions |
Coverage Ratio - Default Stock |
| 2014 |
0.00% |
0 |
0.00% |
| 2015 |
0.00% |
0 |
0.00% |
| 2016 |
0.00% |
0 |
0.00% |
Key Observations
- CET1 Ratio: The CET1 ratio decreased from 13.6% in 2013 to 12.0% in the adverse scenario by 2016, while it increased to 15.2% in the baseline scenario.
- Risk Exposure: The total risk exposure increased slightly from 163,722 (mIn EUR) in 2013 to 173,515 (mIn EUR) in the adverse scenario by 2016, and remained relatively stable at 164,134 (mIn EUR) in the baseline scenario.
- Impairment Losses: In the adverse scenario, impairment losses significantly increased from 711 (mIn EUR) in 2013 to 7,838 (mIn EUR) in 2016, while in the baseline scenario, they increased only slightly to 2,271 (mIn EUR).
- Operating Profit: Operating profit before impairments increased in both scenarios, with a larger increase in the baseline scenario (from 4,489 to 10,018 mIn EUR) compared to the adverse scenario (from 4,489 to 5,938 mIn EUR).
- Capital Changes: The CET1 capital decreased from 22,244 (mIn EUR) to 20,875 (mIn EUR) in the adverse scenario, but increased to 25,016 (mIn EUR) in the baseline scenario.
- Securitisation Deductions: No securitisation and re-securitisation positions were deducted from capital in both scenarios.
Summary of Key Data
- CET1 Threshold (Adverse Scenario): 5.5% (9,543 mIn EUR)
- CET1 Threshold (Baseline Scenario): 8.0% (13,131 mIn EUR)
- Total Risk Exposure (Adverse Scenario): 173,515 mIn EUR
- Total Risk Exposure (Baseline Scenario): 164,134 mIn EUR
- CET1 Ratio (Adverse Scenario): 12.0%
- CET1 Ratio (Baseline Scenario): 15.2%
This summary highlights the financial resilience of Nordea Bank AB (publ) under the 2014 EU-wide stress test scenarios, showing how the bank's capital and risk exposure changed over the period.
