The Swedish Financial Supervisory Authority (Finansinspektionen, FI) has decided to impose a temporary add-on to SEB's capital requirements, following a supervisory review of the bank's Internal Ratings-Based (IRB) models. SEB commented on the decision after FI published it.
SEB said the outcome is expected to temporarily affect its capital buffer negatively by 120bps, through an increase in risk exposure amount (REA) of around SEK 150bn. The bank said the increase will be implemented by 31 December 2026 and is expected to remain in place until model approvals are received.
According to FI, the add-on follows its identification of more extensive deficiencies in SEB's internal credit risk models than previously known. During 2026, the authority conducted a broader review of the bank's internal models for corporate exposures and for loans that are not exposures to households or the public sector.
Finimize reported that FI said the flaws will lift SEB's core tier one capital requirement by about SEK 10 billion. Finimize also reported that the add-on stays until FI signs off on the updated models, and that SEB expects to start submitting IRB model applications in the third quarter of 2027 at the latest.
FI previously decided in September 2023 to impose a temporary add-on to the bank's capital requirements. According to FI, SEB has been authorised to use internal models to calculate the capital requirements for its credit risk since 2007.
Finimize noted that SEB reported a core tier one capital requirement of SEK 154bn as of 30 June.
Related: SEB Named Jonas Ahlström Acting CEO After Johan Torgeby Resigned