The Financial Supervisory Authority of Norway has published an inspection report on DNB Bank ASA's Consumer, Industrials & Financial Institutions division, identifying weaknesses in credit assessments and risk controls. The findings call for clearer downside scenarios in acquisition financing, closer alignment between divisional limits and the bank's risk appetite, and fuller documentation of measures to manage money laundering risk in credit decisions.
For acquisition financing, downside scenarios were too close to base cases to adequately illustrate potential adverse outcomes. These scenarios should differ materially to make the financing's high risk and range of possible outcomes clear to decision makers. Excluding goodwill reductions from risk scenarios also risks overstating borrowers' equity when portfolio companies underperform. Separately, credit risk limits should reflect differences between sectors rather than applying identical divisional thresholds to each segment, which limits their usefulness for managing some portfolios.
Although DNB established a risk appetite limit in 2026 for the maximum share of high environmental, social and governance risk in its portfolio, the division had no corresponding scorecard target at the inspection. Such limits should be reflected across underlying business areas and divisions. In the 10 credit files reviewed for customers with high money laundering risk, all explained the risk classification, but only a few specified enhanced customer due diligence measures for ongoing monitoring. Relationship managers must document how they assess and manage that risk. DNB plans to amend its credit rules to describe nonfinancial risks more clearly.