Sparebanken Vest has received an advance notice of an updated MREL requirement from theNorwegian Financial Supervisory Authority (NFSA). The MREL requirement is determined at 26.4 per cent of adjusted Risk Weighted Assets, applicable at all times. Since Common Equity Tier 1 (CET1) capital used to fulfill the risk weighted MREL cannot, at the same time, be used to fulfill the Combined Buffer requirement, the calculated actual need for Own Funds and Eligible Liabilities will effectively be 34.4 per cent of adjusted Risk Weighted Assets. The requirement will come into force from1 January 2022 . This year's requirement takes into account the subordination cap in BRRD2. This means that only parts of the MREL requirement needs to be fulfilled with subordinated instruments. The cap is calculated as the highest of 8 per cent of Total Assets and the formula Ax2+Bx2+C, where A is the Pillar 1 requirement, B is the Pillar 2 requirement and C is the Combined Buffer requirement. It is the latter that will be the relevant requirement, and based on the bank's capital requirements as of31 December 2020 this meant a cap of 27.4 per cent. The NFSA has determined that the bank is required to have Own Funds and subordinated liabilities of at least 27.4 per cent of the adjusted Risk Weighted Assets. CET1 used to fulfill the combined buffer requirement can be used to fulfill the subordination requirement calculated by the aforementioned formula. The difference between the effective MREL requirement of 34.4 per cent and the cap on subordination (27.4 per cent) can be fulfilled with issued senior unsecured debt with a residual maturity of more than 12 months, applicable at all times. The subordination requirement shall, as a minimum, be phased in linearly during the rest of the transitional period and shall be fulfilled entirely from1 January 2024 . The starting point for the linear phase-in, as of1 January 2022 , will be the effective minimum requirement for subordination of 21,5 % of adjusted Risk Weighted Assets (the minimum requirement for subordination of 13.5 per cent plus the combined buffer requirement of 8 per cent). Since the above is in line with the bank's expectations, no material changes are expected between the advance notice and final requirement. Bergen,24 November 2021 For further information, contact: EVP and CFO,Frank Johannesen , tel.: +47 952 65 971 and e-mail: frank.johannesen@spv.no EVP and CRO,Jan-Ståle Hatlebakk , tel. +47 916 62 284 and and e-mail: jan-stale.hatlebakk@spv.no Director of Finance and IR,Hans Olav Ingdal , tel. +47 948 09 328 and e-mail: hans.ingdal@spv.no This information is subject to the information requirements pursuant to the Norwegian Securities Trading Act section 5-12.
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