Departments
In 2023, the Deposit Guarantee Fund covered 135 companies: 65 banks (of which 6 foreign banks having applied for supplementary coverage in Denmark and 5 banks in the Faroe Islands and Greenland), 6 mortgage credit institutions, 49 investment companies, 4 investment management companies and 11 managers of alternative investment funds. The companies are distributed on 4 departments:
the Banking Department (65 banks)
the Mortgage Credit Department (6 institutions)
the Investment and Portfolio Management Department (investment companies and certain investment management companies and managers of alternative investment funds (64 companies and investment funds)
The Restructuring Department (59 institutions which are already included in the Banking Department)
Results in 2023
The Deposit Guarantee Fund generated a surplus of DKK 404 million in 2023 (2022: a deficit of DKK 516 million). The surplus was attributable to interest income on the securities portfolio and deposits with Danmarks Nationalbank in the amount of DKK 108 million and market value gains on the securities portfolio of DKK 284 million.
At 31 December 2023, the Deposit Guarantee Fund had total assets of DKK 12.3 billion. Of these assets, the Banking Department accounted for DKK 8.8 billion and the Restructuring Department accounted for DKK 3.5 billion, DKK 3.2 billion of which consisted of commitments. In addition, the Mortgage Credit Department had assets of DKK 11 million and the Investment and Portfolio Management Department had assets of DKK 12 million.
Loss guarantees provided
The Restructuring Department issued loss guarantees to Finansiel Stabilitet in connection with the resolution of Amagerbanken af 2011 (FS Finans III A/S) and Fjordbank Mors af 2011 (FS Finans IV A/S), with the loss guarantee regarding FS Finans IV A/S having been capitalised.
Financing of the Deposit Guarantee Fund
The assets of the Banking Department must equal 0.8% of the banks’ covered deposits. The annual contribution is determined as the amount required to meet the target level within a period of up to six years. If the assets exceed the determined target level, the obligation to contribute will cease. The obligation to contribute will resume if the assets fall below the determined target level. The individual contributions of the comprised banks is determined on the basis of a ratio-based contribution model.
At 31 December 2023, the assets of the Banking Department amounted to DKK 8.8 billion, against a determined target level of DKK 6.9 billion. As the assets exceeded the target level by an excess coverage of DKK 1.9 billion, no contributions were collected for the Banking Department in 2023. Based on applicable rules in the area, the calculation of the target level of total assets currently does not take into account deposits serving certain social purposes.
Previous studies have shown that special covered deposits in Denmark amount to approximately DKK 200 billion. When these are added to the calculation of the Banking Department’s target level, the level grows to approximately DKK 8 billion, substantially reducing the excess coverage.
The Investment and Portfolio Management Department is required to have total assets of at least DKK 10 million, consisting entirely of commitments. No cash contributions are collected, but adjustments are made to the commitments.
The Restructuring Department is required to have total assets of DKK 3.2 billion in commitments for resolution purposes. As the Department incurred no losses in 2023, it was not necessary to collect cash contributions. Instead, commitments were redistributed among the banks in the Department.
The Mortgage Credit Department is required to have total assets of at least DKK 10 million. However, the part of the assets collected on the basis of the covered funds must total at least DKK 2.5 million of the total assets. As the assets have reached the target level and Danish mortgage credit institutions no longer have covered cash funds, no cash contributions are collected. Finansiel Stabilitet only carries out an adjustment of commitments totalling DKK 7.5 million.