With an average credit assessment of 'bbb+' for the fifth year in a row, a sample of over 300 Nordic banks demonstrated stable creditworthiness in 2018. Nordic Credit Rating's (NCR's) bank assessments were also stable when assessing country- or segment-level creditworthiness. However, for the first time since 2011, the average score that underlies NCR's assessments did not improve from the previous year. NCR believes that this could signal an end to the steady improvement that Nordic banks of all shapes and sizes have made over the past decade.
"There is certainly potential for further consolidation, continued automation and an increased focus on financial crime to improve the stability of the sector on the margin ", says Sean Cotten, lead analyst for financial institutions at NCR. "However, reduced focus on capital accumulation, margin pressure and higher risk appetite associated with a growing share of unsecured consumer lending could halt further progress. In addition, slowing growth across Europe could extend low interest rate policies or spur a potential increase in credit losses."
NCR's analysis of its own credit assessments for over 300 Nordic banks based on nearly a decade of financial data demonstrates that the positive trends that have permeated each sector and geography of the Nordic banking landscape stagnated in 2018, with the exception of Norwegian banks as a whole and Nordic mortgage lenders which showed modest improvements.
You can download the full research report on https://nordiccreditrating.com/ratings-research/research.
If you have any questions, please contact:
Sean Cotten, Lead analyst, +46 732 32 43 78, sean.cotten@nordiccreditrating.com
Geir Kristiansen, Analyst, +47 90 78 45 93, geir.kristiansen@nordiccreditrating.com