Norwegian Finans Holding ASA (”NOFI”) refers to its half-year report released February 20, 2020. In the report, the board of directors of NOFI (“the Board”) announced that it will propose a cash dividend to its shareholders of NOK 3.18 per share for the financial year 2019.
After close of the market on March 5, NOFI and Bank Norwegian have received a letter from the Financial Supervisory Authority of Norway (“the FSA”) stating that the FSA is considering to restrict NOFI from paying such dividend. The FSA bases its concern on the development in the bank's non-performing loans and the banks provisions for such loans, as released to the market in the financial report on February 20. The FSA notes that a weaker development in the Norwegian and international economy could entail losses that would impair the group's capital adequacy.
The FSA has made no decision yet, but it is NOFI's understanding that the outcome will depend on the result of the coming dialogue with the FSA on capital, dividends and intra-group contributions from Bank Norwegian to NOFI as its parent company.
The dividend proposal presented by the Board was based on a thorough evaluation of the group's solidity and performance and the Board can see no change in these assessments and has noted no deterioration in credit quality. The CET1 for NOFI, Bank Norwegian and consolidated is expected to be 19.7% after the payment of the proposed dividend, compared to the CET1 requirement determine by the FSA including management buffer of 18.9% (18.5% from March 2020). Without the dividend, the CET1 would be 21.2%.
After the dividend payment, the bank will continue to be well in compliance with all regulatory capital requirements, including the MREL requirements commented on in our November 27, 2019 stock exchange notice. The bank received its revised regulatory capital requirement (SREP) January 27, 2020 from FSA with a reduction of the CET1 requirement from 18.9% to 18.5%.
The FSA has requested NOFI and Bank Norwegian's comments within March 13, 2020. The Board will provide its response and keep the market updated with respect to any developments in the matter. The AGM of NOFI is expected to take place on April 29, 2020.
The following person may be contacted: CFO Pål Svenkerud; phone +47 93403904
This information is subject to disclosure requirements pursuant to the Norwegian Securities Trading Act section 5‑12.