The Norwegian Financial Supervisory Authority has published an inspection report on SpareBank 1 Sogn og Fjordane following an on-site review of internal governance, operational risk, corporate credit risk, IFRS 9 loss assessments, and liquidity and funding risk. It found weaknesses in governance, internal control, capital reporting and credit practices, concluding that key control elements have not been sufficiently operationalized for the bank’s size and ambitions. The report also says the bank had errors in capital adequacy calculations and reporting over several quarters, while the interaction with compliance with the Minimum Requirement for Own Funds and Eligible Liabilities was not assessed in a sufficiently holistic way. The authority expects the board to strengthen the link between strategy, risk appetite, financial projections and the Internal Capital Adequacy Assessment Process, and to improve independent quality assurance of capital calculations and reporting, including where data or calculations come from alliance structures or external providers. It also calls for more active and forward-looking use of the risk appetite and internal control frameworks, stronger follow-up of breaches and incidents, and clear closure of material weaknesses in information and communication technology, the Digital Operational Resilience Act and data protection. In corporate lending, it found that the bank’s credit rules and moderate risk appetite were not adequately reflected in day-to-day credit decisions, citing weaknesses in documentation, handling of policy deviations, assessment of open risk, grouping of connected counterparties, follow-up of risk mitigants, and the early identification and monitoring of higher-risk exposures. Liquidity and funding risk management was assessed as generally well developed, but the report highlighted structural reliance on the covered bond channel, concentration in larger professional deposits and key-person vulnerabilities in the finance function. The board broadly agreed with the authority’s assessments and said it will follow up through a time-bound action plan. The authority asked for the minutes of the board meeting that considers the report and requested that the bank send the report to its external and internal auditors.
Norwegian Finanstilsynet2026-07-01
Norwegian Financial Supervisory Authority identifies governance capital reporting and credit control weaknesses at SpareBank 1 Sogn og Fjordane
The Norwegian Financial Supervisory Authority found weaknesses at SpareBank 1 Sogn og Fjordane in governance, internal control, capital reporting and corporate credit practices. It highlighted repeated capital adequacy reporting errors, insufficient integration of risk appetite into decision-making, and deficiencies in credit documentation and monitoring. The board broadly accepted the findings and said it will implement a time-bound action plan.