Regulatory Alerts2026-06-01
Report on Ordinary Inspection of Danske Andelskassers Bank A/S
The Danish Financial Supervisory Authority issued this inspection report following an ordinary review of Danske Andelskassers Bank A/S in 2026, mandating that the bank's executive board annually assess critical data quality and initiate corrective measures to prevent decision-making on insufficient grounds. The report further orders the bank to ensure its compliance function conducts independent, effective evaluations of its control procedures, addressing risks that current reviews may appear more reassuring than they actually are. Additionally, the inspection highlighted elevated loan growth and agricultural exposures, noting that recent organizational restructuring costs have not yet been offset by earnings, while a solvency requirement of 10.3 percent was established following the downgrade of two group loans.
Inspection Report 01-06-2026
The Danish Financial Supervisory Authority conducted an ordinary inspection of Danske Andelskassers Bank A/S in weeks 5 and 8 of 2026 as part of the ongoing supervision of the bank. The inspection included a review of the most significant risk areas based on a risk-based assessment.
Summary and Risk Assessment
Danske Andelskassers Bank A/S is a medium-sized credit institution headquartered in Aarhus. The bank provides banking services to retail customers as well as small and medium-sized business customers, including agricultural customers.
The bank's primary geographical market area is Jutland, Funen, Greater Copenhagen, as well as Helsingør, Roskilde, Greve, and Køge municipalities. The bank opened new branches in Nordhavn and Horsens in 2024, in Risskov in 2025, and will open branches in Højbjerg, Kolding, and Herning (the advisory center Andelskassen Sundhed) in 2026. The bank subsequently has 23 branches.
The bank's risk profile is characterized by higher loan growth and a larger share of agricultural exposures compared to comparable institutions. High loan growth entails a risk that growth occurs at the expense of credit quality.
The bank has incurred significant costs due to organizational changes and the establishment of new branches, which have not yet been offset by increased earnings. The bank must focus on ensuring robust long-term earnings, including whether earnings match the costs and risks the bank assumes.
The executive board has not assessed the data quality for significant data and has not initiated any necessary measures in case of insufficient data quality. This entails a risk that decisions are made on an insufficient basis, which may lead to errors and deficiencies in risk management. The bank has been ordered to ensure that the executive board assesses the quality of data significant to the bank's management at least once a year, and initiates necessary measures if the quality is insufficient [1].
The compliance function conducts investigations primarily as either document reviews, compliance reviews, or a combination thereof. The compliance function does not conduct an independent assessment of whether the bank's controls are effective. This entails a risk that the investigation's conclusions appear more reassuring than they actually are. The bank has been ordered to ensure that the compliance function conducts sufficient independent control and assessment of whether the bank's methods and procedures for compliance with applicable legislation, market standards, and internal rules are effective [2].
During the inspection, 91 group loans were reviewed, corresponding to approximately 21 percent of the bank's total loans as of 30 September 2025. Two group loans were downgraded to a lower risk classification, resulting in an additional write-down of DKK 1 million and an increase in the solvency add-on for large exposures with financial difficulties by DKK 21.4 million (0.2 percent of risk-weighted assets). The bank's solvency requirement was calculated at 10.3 percent following the inspection.
[1] cf. Regulation on management and control of credit institutions etc. (BEK no. 1103 of 30/06/2022), § 8, para. 11.
[2] cf. Regulation on management and control of credit institutions etc. (BEK no. 1103 of 30/06/2022), § 17, para. 1 and 2.
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