The Financial Supervisory Authority of Norway flags shortcomings at Trøndelag Sparebank in identifying and reporting groups of connected counterparties

The Financial Supervisory Authority of Norway published a supervisory report following a thematic review of Trøndelag Sparebank’s policies and practices for identifying and grouping connected counterparties under the large exposures framework. The review found that the bank’s written guidelines are detailed, but that assessments are not carried out and documented in a sufficiently systematic way, with weaknesses in quality assurance reflected in errors in exposure reporting. The report highlights gaps in how the bank operationalises its framework, including limited systematic follow-up beyond customers on the watchlist and no effective separate process for assessing exposures above 5 percent of Tier 1 capital. The supervisor also pointed to incomplete grouping in quarterly exposure reporting (ENGA) when compared with shareholder register information, noting that the bank did not contest the findings and that later reporting appeared to correct the identified errors. Finanstilsynet expects the bank to strengthen documentation, consistency and controls, update regulatory references and align its guidelines with Commission Regulation (EU) 2024/1728, including reviewing the bank’s approach to 50/50 ownership situations; it also expects a documented reassessment of the bank’s internal limit for single-name or group exposures, which is set below the 25 percent regulatory maximum but was not justified in the ICAAP. Finanstilsynet noted that the board has considered the findings and that necessary improvements are or will be implemented, and requested that the bank send a copy of the report to its auditor.