Nordic Credit Rating (NCR) has affirmed its 'BBB+' long-term issuer rating on Norway-based savings bank Haugesund Sparebank. The outlook is stable. The 'N2' short-term issuer rating, 'BBB+' senior unsecured issue ratings, 'BBB' Tier 2 issue rating, and 'BB+' Additional Tier 1 issue rating have also been affirmed, in accordance with NCR's revised financial institutions rating methodology. The ratings are no longer under criteria review.
Rating rationale
NCR has reviewed its long-term and short-term issuer ratings, issue ratings, and outlook on Haugesund Sparebank following the revision of its methodology for assigning ratings to financial institutions (see Related publications). We consider that our amendments to the methodology have not had a material impact on our view of Haugesund Sparebank's creditworthiness, and that there have not been significant changes in its overall risk profile. Consequently, we have affirmed our ratings and maintained the stable outlook on the ratings on Haugesund Sparebank.
Our ratings on Haugesund Sparebank are based on the current legal entity, prior to its merger with Tysnes Sparebank, and consider only public information on Tysnes Sparebank. Completion of the merger was originally planned in the second half of 2024 but was then postponed. We now expect it to be finalised in line with the revised merger plan, meaning by 1 Sep. 2025, or before the end of the third quarter at the latest (see Related publications).
We believe that the asset quality in Tysnes Sparebank's net loan exposures has decreased following significant portfolio reviews in the past 12 months, and large write-downs of high-risk loans. However, we are maintaining our assessment of the merged bank's credit and market risk as well as its loss performance, until we have further insight into Tysnes Sparebank's loan book.
Stable outlook
The stable outlook reflects our expectation that Haugesund Sparebank's merger with Tysnes Sparebank will be finalized without further complications. It also incorporates our view the bank will generate strong earnings despite a weakened domestic economy. While we expect loan losses will remain higher than those of peers, we do not project a significant impact on the bank's capital generation.
We could raise the rating to reflect improved asset quality metrics, with net Stage 3 loans as a share of net loans at around 1% over a sustained period; a cost-to-income ratio below 45% and a pre-provision income/risk exposure amount above 2.5% for a protracted period. We could also raise the rating in response to a strengthened market position in the merged bank's markets.
We could lower the rating to reflect significant increases in loan losses or non-performing loans beyond our expectations; a Tier 1 ratio below 18% over a protracted period; or in response to a material deterioration in the local operating environment that negatively affects the bank's growth or profitability.
Related publications
i) NCR Comments: Haugesund Sparebank 'BBB+' rating and outlook unchanged following updated merger plan, published 6 Mar. 2025.
ii) NCR Comments: Haugesund Sparebank 'BBB+' rating and outlook unchanged by postponement of merger, published 4 Sep. 2024.
iii) Haugesund Sparebank assigned 'BBB+' long-term issuer rating; Outlook stable, published 28 Jun. 2024.
iv) Nordic Credit Rating publishes amended Financial Institutions Rating Methodology, published 12 May 2025.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB+ | BBB+ |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | BBB+ | BBB+ |
| Tier 2 issue rating: | BBB | BBB |
| Additional Tier 1 issue rating: | BB+ | BB+ |
Contacts:
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
The methodology documents used for this rating are NCR's Financial Institutions Rating Methodology published on 12 May 2025, NCR's Rating Principles published on 14 Feb. 2024 and NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024. For the full regulatory disclaimer please see the rating report.