Norwegian savings banks are well positioned for growth and strong performance in 2026, according to a report published by Nordic Credit Rating (NCR) today. Net interest margins held up better than expected in 2025. Solid margins and strong lending growth have boosted earnings across the sector, although declining rates and increased competition may pressure margins ahead. The central bank's cautious approach to the policy rate path should help mitigate this pressure, maintaining strong net interest margins.
“We expect NCR-rated Norwegian savings banks' lending growth to exceed domestic credit growth, supported by CRR3,” said NCR credit analyst Christian Yssen. “While capital ratios are likely to decline from a 2025 peak, strong pre-provision earnings provide meaningful buffers against potential credit losses.”
High interest rates have successfully slowed economic expansion and lowered inflation to moderate levels, with the central bank expecting inflation to approach the two percent target by 2028. Despite elevated interest rates, economic indicators remain solid, and rising housing prices have strengthened credit demand. This positive macroeconomic momentum is expected to persist, although uncertainty typical of a late-cycle environment remains.
The implementation of CRR3 has significantly strengthened capital ratios for small and medium-sized savings banks, creating a more level playing field in the credit market. This has positioned these banks well for growth, with most lending directed towards low-risk residential mortgage customers. Strong earnings and capitalisation are expected to offset late-cycle loan losses, although elevated risk remains in real estate development loans and the building and construction sector.
Contacts:
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com