The Norwegian Financial Supervisory Authority has published an on-site inspection report for Tolga-Os Sparebank that identifies weaknesses in governance, risk management and reporting, including issues linked to ambitious growth targets and the handling of credit and liquidity risk. The inspection, conducted 24–25 November 2025, reviewed internal governance and operational risk, credit risk including IFRS 9 loss assessments, and liquidity and funding risk. The report highlights strong lending growth and ambitious growth targets without sufficient assessment of capital needs, funding strategy or the risk of adverse selection. It also finds weaknesses in the organisation and staffing of the risk management function and concludes that risk reporting to the board has not provided a precise and forward-looking basis for decisions, citing unclear and inconsistent risk classifications, limited trend and migration analysis, and overlapping responsibilities between the credit manager and the risk management function. Further findings include the need for better documentation of board assessments and discussions, clearer handling of conflicts of interest and independence, clearer ownership of governance documents, more systematic follow-up of large and challenging exposures, and a clearer approach to risks arising from a nationwide market area, including the definition and use of a watch-list. On liquidity risk, the report points to weak monitoring of key indicators, breaches of internal limits without sufficient follow-up, and limited intra-month monitoring of the Liquidity Coverage Ratio (LCR), compounded by reliance on external parties for management and reporting. Finanstilsynet expects more frequent monitoring of LCR and notified withdrawals from term deposits, alignment between policy and practice for updating liquidity stress tests, and that guardianship deposits are assessed and reflected in liquidity risk reporting and LCR outflow assumptions. The authority notes that the board reports that remedial actions have already been initiated and asks the bank to share the report with its auditor.
Norwegian Finanstilsynet 2026-01-23
Norwegian Financial Supervisory Authority flags governance, credit and liquidity risk management weaknesses at Tolga-Os Sparebank
The Norwegian Financial Supervisory Authority's inspection of Tolga-Os Sparebank revealed weaknesses in governance, risk management, and reporting, particularly concerning ambitious growth targets and credit and liquidity risk handling. The report highlights inadequate capital needs assessment, unclear risk classifications, and insufficient liquidity risk monitoring. The authority expects improved monitoring practices and alignment between policy and practice, noting remedial actions have been initiated.