Nykredit's business model dictates a strong capital structure to support competitive credit ratings and ensure business continuity regardless of considerable fluctuations in economic activity.
Nykredit is a financial mutual owned 79% by an association of customers ‘Forenet Kredit’ who has capital reserves of DKK 17.9 billion (as of December 31, 2023) earmarked for supporting a capital contribution to Nykredit, should the need arise. In addition, 17% of Nykredit is owned by a group of five Danish pension funds who have committed to contribute further capital of up to DKK 7.5 billion, should the need arise. Thus, Nykredit has access to additional capital worth DKK 25.4 billion.
As a result, Nykredit's capital flexibility matches that of a listed company. This is acknowledged by the Danish Financial Supervisory Authority.
Nykredit’s Board of Directors has set the CET1 capital target at 15.0-16.0% of the risk exposure amount (REA). This includes CET1 capital for both Basel IV and a potential severe business cycle downturn. As of December, 31, 2023 Nykredit’s CET1 ratio was 20.4% – not including the capital reserves of Forenet Kredit and the capital commitments from the five Danish pension funds.
Note from 2017: "Nykredit's capital flexibility need"
