Swedish lender Skandinaviska Enskilda Banken AB said Tuesday that the country's financial regulator has lowered a key capital requirement following its annual review process.
The Swedish Financial Supervisory Authority reduced SEB's so-called Pillar 2 requirement to 2.1% from 2.2%, the bank announced in a statement.
Pillar 2 requirements are additional capital buffers regulators impose on individual banks to cover specific risks.
The portion of the requirement that must be met with the highest quality capital, known as Common Equity Tier 1, was unchanged at 1.5%, the company said.
The regulator also significantly lowered its guidance for the bank's leverage ratio-based capital buffer to 0.15% from 0.50% in the prior year's decision.
The new requirements are effective as of Sept. 30.
The decision marks a further easing from 2023, when the regulator had increased the requirement with a temporary add-on related to an ongoing review of the bank's internal risk-based models.
The easing comes as SEB separately faces an expected 5% increase in its risk exposure amount due to required updates to risk models for its subsidiaries in the Baltic region.
SEB has said that increase is expected to be temporary and will likely be implemented starting in late 2025 or early 2026.
More from this issuer
Related coverage
Skandinaviska Enskilda Banken AB on Thursday reported an 18% drop in third-quarter operating profit, as provisions for expected credit losses more than doubled in the first nine months of the year amid a weak Swedish economy.
Skandinaviska Enskilda Banken on Wednesday reported a 12% drop in second-quarter operating profit, as declining interest rates weighed on its lending income.
Swedish lender Skandinaviska Enskilda Banken on Wednesday said it expects its risk exposure amount to increase by about 5% following discussions with authorities over its internal risk models.