The Diamond Test Model

Spar Nord complies with all five parameters (limit values) that the Danish Financial Supervisory Authority lists in its Diamond Test Model.

The Danish Financial Supervisory Authority has introduced a test model, the so-called ‘Tilsynsdiamanten’ (“The Supervisory Authority Diamond Test Model”) that is used to test the financial strength and risk exposure of a financial institution based on five parameters, each having its unique limit value. Together the five parameters aim to provide a picture showing how Danish financial institutions are operating, whether they are run at a sound risk level, and whether a given financial institution is financially robust.

The five parameters (limit values) are:

  • Sum of large exposures (less than 125% of the capital base)*
  • Lending growth (less than 20% per year)
  • Real property exposure (less than 25% of total loans)
  • Stable funding, or funding ratio (lending not to exceed 1 time the volume of deposits)*
  • Excess liquidity coverage ratio (> 100%)

For Spar Nord, the test shows that the Bank is well below the recommended limit values.


Benchmarks Diamond Test Model recommendations 30.09.22 30.09.21
Large exposures as % of capital base <175 pct. *) 89.2 89.3
Lending growth <20 pct. 11.4 13.7
Property lending <25 pct. 10.3 9.6
Excess liquidity coverage >100 pct. 218 254

*) As of 1 January 2018, the benchmark for large exposures was changed from below 125% to below 175% of capital base.