Skip to main content
Home Nordic Credit Rating

Main navigation

  • Home
  • Our offerings
  • Ratings & Research
  • Governance & Policies
  • About us
  • Careers
  • Contact

Nordic niche banks navigate through winds of change

Nordic Credit Rating (NCR) said most of the nine Nordic niche banks in its analysis are experiencing substantial transformation in a report published today. These include strategic shifts, changes in ownership, acquisition of new portfolios, and three banks relocating their domicile from Norway.

"One-off transactions complicate comparisons with previous quarters. However, we believe credit losses have stabilised at about 3.2% annually for the sample, excluding one-off impacts," said NCR credit analyst Sean Cotten. "These losses generally remain well within each bank's earnings buffers, with over half of the sample reporting a return on ordinary equity of 9.5% or higher."

Aside from TF Bank's sale of a large portion of its non-performing loans, Stage 3 loans are still increasing as a share of total lending for most banks. Avida also noted a significant rise in provisions and a decrease in gross non-performing loans, which materially lowered their net Stage 3 exposure.

Affected banks quickly adapted to the Swedish regulator's updated guidance on funding and liquidity metrics by increasing their liquidity buffers and holding a larger proportion of liquid assets.

Contacts: 
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com 
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com

research Sector comment 250304 Niche banks Q424-report-final_updated.pdf (1.39 MB) Financial ALL ALL Financial Off