Capital adequacy

Q2 2025

Aktia Bank Group (Aktia Bank Plc and all its subsidiaries except Aktia Life Insurance) applies internal risk classification (IRB) for the calculation of capital requirement for retail exposures and certain corporate exposures. The standardised approach is used for other exposures.

The Bank Group’s Common Equity Tier 1 (CET1) capital ratio increased to 12.8% (12.0%), which is 4.2 percentage points above the minimum requirement. The improvement is explained by reduced risk-weighted assets, which is mostly only temporary (see Risk-weighted assets below).

CET1 capital decreased mainly as a result of the insolvency of a large individual customer increasing expected loss (EL) in the first quarter of 2025. This effect was partly offset by a decrease in the average EL following the entry into force of the new CRR3 capital adequacy regulation as well as by an increase in the fund at fair value.

Risk-weighted assets decreased significantly during the first half of the year as CRR3 entered into force. The decrease is mainly attributable to risk-weighted assets for corporate loans risk-weighted according to the F-IRB methodology (Foundation Internal Ratings Based Approach). Aktia intends to switch from the F-IRB approach to the standardised approach later in the year, at which time risk-weighted assets for the loan portfolio are expected to increase again. The total effect of the implementation of CRR3 and the subsequent transition from the F-IRB approach to the standardised approach is estimated to overall reduce the risk-weighted assets.