MREL requirement

Further to today’s announcement from the Norwegian Financial Supervisory Authority (the “FSA”), DNB ASA has received minimum requirement for own funds and eligible liabilities (the “MREL requirement”).

DNB ASA shall hold total MREL capital equal to 36.7 percent of its adjusted risk weighted assets based on the balance per 31 December 2018, which leads to a need for eligible debt of NOK 157 billion. This is in line with the previously communicated expectation of approximately NOK 150 billion. The MREL requirement will vary over time based on changes in risk weighted assets and capital requirements.

The minimum MREL requirement shall be met per 30 June 2020. Senior preferred debt issued by DNB Bank ASA per 31 December 2019, with a minimum remaining tenor of one year, will qualify as MREL capital until 31 December 2022. As of 31 December 2019, outstanding senior preferred debt with a minimum remaining tenor of one year amounts to NOK 178 billion. 

The FSA requires the MREL eligible debt to be issued by DNB ASA (the holding company of the DNB Group) to third party investors. Relevant group units, including DNB Bank ASA, shall issue internal MREL eligible debt to DNB ASA in order to establish an adequate loss absorbing mechanism in the group. The requirement regarding structural subordination shall be met within 31 December 2022.              

DNB has, however, initiated a process to merge DNB ASA and DNB Bank ASA, making DNB Bank ASA the ultimate parent company of the DNB Group. The intention of the merger, which requires permission from the Norwegian Ministry of Finance, is to enable DNB to issue non-preferred senior debt from DNB Bank ASA.  

DNB ASA is required to deliver a plan to the FSA on how to fulfill the MREL requirement within 31 March 2020.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

For further information, please contact:
Rune Helland, head of Investor Relations, tel. (+47) 23 26 84 00 / (+47) 977 13 250