The Norwegian Financial Supervisory Authority has published an inspection report on Rogaland Sparebank covering an on-site review in September 2025 focused on internal governance and control, credit risk including IFRS 9 loss assessments, and market and liquidity risk. The report identifies shortcomings in internal control reporting and risk reporting to the board, and sets expectations for a more structured annual risk assessment process and consolidated reporting. The Authority expects risk reports to better summarise developments and compliance with board-approved management parameters and risk limits across risk policies, and for the board minutes to document the board’s assessments and follow-up actions, supported by a system to track open items, deadlines and ownership. It highlights the need for extensive guidance and well-prepared credit decisions for the bank’s “Balansebank” product, describing it as resource-intensive and calling for a clearer strategy and better adherence to internal guidelines. On IFRS 9, the report notes the bank’s stage-allocation approach relies largely on PD changes and that the bank lacks qualitative methods for identifying significant increases in credit risk; it also indicates the bank should consider a group-based approach to Stage 2 assessments in future reporting, and, if the Eika PD model continues to show underestimation for corporate exposures at total-portfolio level, adjust its own impairments accordingly. For liquidity and funding risk, the report points to unclear presentation of limits and targets in the liquidity and finance strategies, including a lack of strategy-level guidance for deposits sourced via the Fixrate platform, and calls for more quantified risk-level thresholds beyond LCR and NSFR (where the bank’s limits are 110% and 105% respectively), clearer escalation actions when risk levels change, and a more usable high-level summary in quarterly risk reporting. The report follows a preliminary inspection report issued in October 2025 and the board’s response in November 2025, and asks the bank to provide a copy of the final report to its auditor.
Norwegian Finanstilsynet 2025-12-12
Norwegian Financial Supervisory Authority finds weaknesses in Rogaland Sparebank’s internal control reporting IFRS 9 credit risk assessment and liquidity governance
The Norwegian Financial Supervisory Authority's inspection report on Rogaland Sparebank highlights deficiencies in internal control and risk reporting, calling for improved governance and structured risk assessments. It emphasizes clearer strategies and adherence to guidelines for the "Balansebank" product, suggesting enhancements in IFRS 9 loss assessments and liquidity risk management. The Authority expects the bank to address these issues and provide the final report to its auditor.