Nordic Credit Rating (NCR) has affirmed its 'BBB' long-term issuer rating on Sweden-based NOBA Bank Group AB (publ) (NOBA). The outlook is stable. The 'N3' short-term issuer rating, the 'BBB' senior unsecured issue rating, the 'BB+' Tier 2 issue rating and the '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 NOBA 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 the bank'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 NOBA.
Stable outlook
The stable outlook reflects our expectation that NOBA's strong earnings and growth rates of 10-13% will provide improved capital flexibility. We project a reduction in loss provisions in our forecast, although years of low real wage growth continue to hamper the bank's customer base. Nevertheless, the bank's increasing economies of scale improve resilience and continued growth across its markets, and its products provide diversification. We do not expect an eventual change in ownership will affect our long-term rating on NOBA.
We could raise the ratings to reflect a combination of increased stability in the operating environment for consumer lenders, demonstrated improvements in NOBA's asset quality metrics and economies of scale, and a Tier 1 ratio sustainably above 15%, with improved capital flexibility.
We could lower the ratings to reflect a Tier 1 ratio sustainably below 15% or a common equity Tier 1 ratio margin to requirements sustainably below 3%. We could also lower the ratings due to weakened loss performance or increased credit risk appetite or if regulatory changes adversely affect consumer lending operations.
Related publications
i) NOBA Bank Group AB (publ) 'BBB' long-term issuer rating affirmed; Outlook stable, 31 Mar. 2025.
ii) Nordic Credit Rating publishes amended Financial Institutions Rating Methodology, 12 May 2025.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB | BBB |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N3 | N3 |
| Senior unsecured issue rating: | BBB | BBB |
| Tier 2 issue rating: | BB+ | BB+ |
| Additional Tier 1 issue rating: | BB- | BB- |
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@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.