Capital structure

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Capital structure

In accordance with its business model, the Nykredit Group (Nykredit) wants to have a well-defined strategy, robust earnings, a strong capital structure and a competitive rating.

Through risk management, Nykredit seeks to ensure financially sustainable solutions in the short and long term. Nykredit values balanced risk management of the different types of risk and a strong capital structure. Nykredit's internal controls and risk management are designed to ensure efficient management of relevant exposures. The overall risk appetite is determined on the basis of Nykredit's strategy, regulatory and credit rating agency capital requirements and the capital targets set out by the Board of Directors. Capital is optimised, allocated and prioritised with due consideration for business returns and strategic decisions.

Nykredit's capital targets towards 2019:

  • Nykredit's target is equity to the tune of 15% of the risk exposure amount (REA), to which should be added the statutory deductions from equity of approximately DKK 5bn. An equity level of 15% is significantly higher than the formal statutory requirement, but from a market perspective it is deemed necessary/appropriate for a major bond issuer such as Nykredit.
  • Nykredit's target is a total capital ratio of 18-20% of REA. Also this level is markedly above the formal requirement, but from a market perspective it is deemed necessary/appropriate for a major bond issuer such as Nykredit.
  • Nykredit aims to build a buffer in the order of DKK 10bn to achieve extra capital coverage during recessionary periods and to secure our growth potential. Such a buffer will help sustain a stable and active lending policy in relation to our customers.
  • Nykredit is now entitled to issue non-voting shares for capitalisation purposes.


The capital requirement varies according to economic trends. All other things being equal, the requirement will rise in periods of high unemployment and high interest rates.

This will be offset by two factors. Firstly, that Nykredit continually manages the employment of capital of the individual business entities, and secondly, that the financial market demand for equity measured as a percentage of REA is likely to decrease to 13-14% in such a scenario

Nykredit's equity requirement towards 2019:

  • In a normal economic climate and during an economic boom: equity of DKK 65bn excluding the growth and regulatory capital buffer (15% of DKK 400bn plus statutory deductions of DKK 5bn), and of DKK 70bn-80bn including the growth and regulatory capital buffer.

CSR Publication 2016


Climate and environment report 2015


The Danish mortgage model

Get the Association of Danish Mortgage Banks description of the Danish mortgage system.