Nordic Credit Rating (NCR) said today that it had revised its outlook on the Norwegian banking sector to stable from negative, while affirming its 'a-' assessment of the industry.
The outlook revision reflects our higher expectations for housing prices, employment, and the international cycle, which are reflected in higher scores for each subfactor of the overall assessment (see table below).
In our last review of the sector earlier this year, we revised our assessment score down by one notch to its current level (see NCR sees increased risk for Norwegian banks, published 3 Apr. 2020), mainly to reflect the initial impact of COVID-19 on the sector.
The stable outlook reflects our expectations of a flatter U-shaped recovery rather than the sharp V- or, in the worst case, W-shaped rebound that we anticipated previously. In our view, countries and markets are better prepared for any renewed upsurge in COVID-19, while localised outbreaks should prove easier to manage than national shutdowns. We note that the Norwegian government's finances are very strong as a result of higher tax income and lower support payments than we previously anticipated, allowing for continued stimulus and support for the most vulnerable sectors and individuals.
If you have any questions, please contact:
Geir Kristiansen, credit rating analyst, +4790784593, firstname.lastname@example.org
Sean Cotten, chief rating officer, +46735600337, email@example.com