The Financial Supervisory Authority of Norway (Finanstilsynet) published an inspection report on Nordea Finans Norge AS and Nordea Finance Equipment AS following an on-site review of credit risk management and customer treatment in asset finance (vehicles and other equipment). The supervisor finds the firms’ credit framework and guidelines overly complex and identifies shortcomings in debt-servicing capacity assessments and documentation under the Norwegian lending regulation, including a system error that resulted in loans being granted without meeting the required interest-rate stress test. The report highlights that affordability assessments did not consistently include all relevant expenses and, in some cases, used income assumptions that were set too high, alongside gaps in the evidencing of credit decisions for both automated and manual processing. Finanstilsynet also flags a technical fault in the calculation of debt-servicing capacity under a rate shock, leading to 291 loans approved and disbursed since 1 July 2023 even though the customer could not handle a 3 percentage point rate increase or at least a 7% interest rate. Other findings include weaknesses in living and housing cost modelling, use of a standard housing cost input of NOK 8,121 for all customers regardless of tenure, deficiencies in complaint-handling routines and registration practices, and an automated arrears process where termination warnings were triggered without a sufficiently case-specific assessment. A further concern relates to a loan distribution commission model via car dealers, where Finanstilsynet requested more information due to customer-interest and conflict-of-interest considerations. Finanstilsynet will pursue additional follow-up, including separate cases on the affordability calculation error and on the commission model for loans distributed through car dealers, and requested the final report from the firms’ thematic credit control conducted in the fourth quarter of 2024.

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