Norion Bank sells NPL portfolio with a gross value of SEK 6.2 billion – the transaction is executed above book value and strengthens capital adequacy
Norion Bank sells NPL portfolio with a gross value of SEK 6.2 billion – the transaction is executed above book value and strengthens capital adequacy
Norion Bank AB (”Norion Bank”) has entered into an agreement to sell a portfolio of non-performing loans (NPL) to subsidiaries of Brocc Finance AB. The portfolio comprises overdue receivables in Sweden, Norway and Finland and amounts to a gross value of approximately SEK 6.2 billion. The purchase price for the portfolio amounts to approximately SEK 2.6 billion, which exceeds the book value of approximately SEK 2.5 billion, and is not expected to have any material impact on Norion Bank’s results upon completion. Norion Bank’s total NPL-volume towards private individuals amounted to approximately SEK 6.4 billion as of the end of the second quarter 2026.
As the portfolio consists of overdue receivables subject to the Prudential Backstop regulation, Norion Bank's CET1 ratio is expected to increase by approximately 1.5 percentage points. Based on Norion Bank’s financial target of maintaining a capital ratio of 200-400 basis points above the regulatory capital requirements, excess capital will increase by approximately SEK 900 million. As the Prudential Backstop deductions are phased in gradually, the sale also results in the avoidance of future net deductions, of approximately SEK 700 million, during the coming three years.
Following the transaction, operating profit is expected to decrease by approximately SEK 100 million during the coming 12 months. The earnings decrease will gradually diminish and due to avoidance of higher capital requirements, the bank’s adjusted return on equity is expected to increase immediately following closing of the transaction.
– We are very happy to communicate the sale of the majority of the bank’s NPL-volumes towards private individuals – marking a transformative and strategically significant transaction for the bank and an important step in the bank's transformation, which began by the end of 2019. This transaction has been a clear priority for a long time and with of our strong balance sheet, the ambition has been to execute the sale at the right terms and conditions. I am therefore pleased that we were able to execute this transaction in excess of book value. The sale results in lower risks, strengthened capital adequacy and a more efficient use of the balance sheet going forward – supporting long-term value for our shareholders, says Martin Nossman, CEO, Norion Bank.
The transaction is subject to the required regulatory approvals and is expected to close in the second half of 2026.