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.
In 2017 a group of pension companies acquired 17% of the shares in Nykredit and have committed to contributing capital of up to DKK 7.5 billion, should the need arise. In addition, Forenet Kredit has committed to building liquidity reserves of DKK 10 billion to be able to participate in any capital increases of Nykredit.
As a result, Nykredit's capital flexibility almost matches that of a listed company. Therefore, Nykredit's CET1 capital need is lower than previously when Nykredit was mainly owned by an association of customers.
The Board of Directors has set the CET1 capital requirement at 15.5-16.5% of the risk exposure amount (REA). In addition to this, Nykredit has already reserved CET1 capital to meet the upcoming Basel requirements.
The EU is expected to adopt Basel IV in 2022, with implementation in the period 2023-2027.