Lower risk-weights for real estate free up Nordea’s capital

ECB cut risk-weights for Swedish and Norwegian commercial real estate to 50% at year-end

A rethink on commercial real estate risk by the European Central Bank (ECB) cut Nordea’s required capital by €900 million ($985 million) in 2019.

The Finnish lender disclosed an economic capital requirement – its own estimate of the equity and debt needed to cover losses – of €25.7 billion, down –3% on 2018. It’s the largest year-on-year drop since 2013. 

The bank’s Common Equity Tier 1 (CET1) regulatory capital requirement was around €19.7 billion at end-2019. Risk-weighted assets (RWAs) dropped

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