Nordic Credit Rating (NCR) said today that the second quarter of 2022 saw additional pressure on Nordic consumer banks' margins as interest rates and credit spreads widened. Credit provision and non-performing loan (NPL) metrics continued to fall, despite inflation and higher rates affecting customers' disposable income. Banks are also raising deposit rates in response to higher capital market funding costs.
"We expect inflation and interest rates to have a greater impact on consumer banks and their customers in the coming quarters," said NCR credit analyst Sean Cotten. "Individuals with already weak financial profiles are likely to be affected by food and energy price inflation in the autumn. We believe that these factors could impact consumption patterns and demand for consumer loans."
Lending growth remained strong, except for Norway, which contracted by over 1pp among the banks in our sample, despite growth in non-traditional mortgages. Significant increases in euro-based exposures reflected a strong appreciation of the euro in the second quarter, given the banks' report in local currencies.
Sean Cotten, chief rating officer, +46735600337, firstname.lastname@example.org
Geir Kristiansen, analyst, +4790784593, email@example.com
Ylva Forsberg, analyst, +46768806742, firstname.lastname@example.org