Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Norway-based savings bank Skudenes & Aakra Sparebank. The outlook is stable. The 'N2' short-term issuer rating, 'A-' senior unsecured issue ratings, 'BBB+' Tier 2 issue rating, and 'BBB-' 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 Skudenes & Aakra Sparebank 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 Skudenes & Aakra Sparebank'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 Skudenes & Aakra Sparebank.
Stable outlook
The stable outlook reflects our view that a weak economic climate and likely credit losses will be offset by Skudenes & Aakra Sparebank's solid earnings and capital position. We believe the bank's low risk appetite, strong real-estate collateral, improved earnings, and solid cost efficiency will enable resilience to a modest economic slowdown. We expect the positive impact of implementing the EU's Capital Requirement Regulation III (CRR3) will further improve the bank's capital ratios.
We are unlikely to upgrade Skudenes & Aakra Sparebank at this time, given its already strong capital position and earnings, as well as its regional concentrations.
We could lower our rating on the bank if its loan growth exceeds our expectations, resulting in a Tier 1 capital ratio below 20%; or pre-provision income to the risk exposure amount moves below 2% or cost-to-income increases to above 50% over a protracted period. We could also downgrade Skudenes & Aakra Sparebank if we observe a material deterioration in the local operating environment that negatively affects asset quality.
Related publications
i) Skudenes & Aakra Sparebank assigned 'A-' long-term issuer rating; Outlook stable, 19 Dec. 2024
ii) Nordic Credit Rating publishes amended Financial Institutions Rating Methodology, published 12 May 2025.
| 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:
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@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.