Nordic Credit Rating (NCR) said today that it had affirmed its 'A' long-term issuer credit rating on
Nordic Credit Rating (NCR) said today that it had affirmed its 'A' long-term issuer credit rating on
Rationale
The rating reflects the bank's strong profitability and capitalisation, as well as its exposure to a growth region of
Unlike most Norwegian savings banks, SB1 Østfold Akershus' equity belongs almost entirely to the owners of the bank's equity capital certificates and the bank is utilising the equity market to finance growth. Two foundations control approximately two-thirds of the certificates. We view the ownership structure as supportive of our standalone credit assessment, but do not notch explicitly to reflect potential support.
Outlook
The outlook is stable, reflecting our expectations of a flatter U-shaped recovery rather than the sharp V- or, in the worst case, W-shaped rebound that we anticipated previously. There are remaining risk factors, including the longer-term impact of changing market dynamics on commercial property prices. However, we believe that the bank's strong capitalisation and earnings make it resilient to a possible new economic downturn. An upgrade is unlikely at this time given the current state of the regional economy and uncertain timeline for a return to normal operating conditions. We could lower the rating to reflect an economic downturn leading to deteriorating credit quality, higher levels of growth than capital generation, or increased competition leading to lower profitability.
Rating list | To | From |
Long-term issuer credit rating: | A | A |
Outlook: | Stable | Stable |
Short-term issuer credit rating: | N-1+ | N-1+ |
Senior unsecured issue rating: | A | A |
Senior non-preferred issue rating: | A | A |
Tier 2 issue rating: | A- | A- |
Additional Tier 1 issue rating: | BBB | BBB |
All research for this issuer is available here.
If you have any questions, please contact:
The methodology documents used for this rating are NCR's Financial Institutions Rating Methodology published on
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