Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Norway-based Romerike Sparebank. The outlook is stable. The 'N2' short-term rating, 'A-' senior unsecured issue rating, 'BBB+' Tier 2 issue rating, and 'BBB-' 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
The affirmation reflects the bank's robust capital position, strong earnings, and presence in a growth region. The cooperation agreement with the Eika banking alliance is viewed positively, as it offers product diversification, shared development costs, and access to residential mortgage financing through Eika Boligkreditt. The bank is expected to maintain strong growth in household and corporate lending, which we project will absorb most of the increase in capital ratios from the implementation of CRR3. We have revised our view of the bank's funding and liquidity position, as we expect loan growth to be increasingly financed by bond issuance, leading to a steady rise in the loan to deposit ratio to above 140%.
Loan losses are expected to remain slightly above recent levels, primarily due to increased credit risk in certain segments of the commercial portfolio, reflecting broader regional and national trends. However, strong pre-provision operating profit is expected to offset these losses.
The rating is constrained by the bank’s significant exposure to real estate in the Romerike region. Additional negative factors include intense competition in the greater Oslo area and the bank’s low market share.
Stable outlook
The outlook is stable, reflecting our view that a softer operating environment and somewhat higher credit losses through 2027 will be offset by improved capital and solid earnings. We expect Romerike Sparebank’s moderate risk appetite, strong real estate collateral, and stable cost base to underpin resilient core profitability despite narrowing net interest margins.
We could raise the rating if the consolidated Tier 1 capital ratio remains sustainably above 25%, pre-provision income to risk exposure amount (REA) is consistently above 3%, and uncertainty about credit risk declines as asset quality metrics improve.
We could lower the rating if asset quality deteriorates, the Tier 1 capital ratio remains below 18%, or pre-provision income to REA falls below 2% or the cost/income ratio exceeds 50% for a sustained period.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A- | A- |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | A- | A- |
| Tier 2 issue rating: | BBB+ | BBB+ |
| Additional Tier 1 issue rating: | BBB- | BBB- |
Contacts:
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@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.