Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Sweden-based savings bank Sörmlands Sparbank AB (publ). The outlook is stable. The 'N2' short-term issuer rating and the 'A-' senior unsecured issue ratings 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 Sörmlands Sparbank 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 the bank'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 Sörmlands Sparbank.
Stable outlook
The outlook is stable, reflecting our view that Sörmlands Sparbank's capital and improved earnings provide solid buffers for managing the weak economic performance in its core markets. We consider downside credit risks to be manageable in light of the bank's solid capital position. We believe that the bank is likely to use its excess capital resources to support increased growth by reducing its share of transferred loans or expanding its lending.
An upgrade is unlikely at this time, given the bank's regional and sectoral concentration.
We could lower the rating to reflect a material deterioration in the regional operating environment, leading to weaker asset quality, core pre-provision earnings sustainably below 1.5% of the risk exposure amount or a sustained reduction in the CET1 ratio to below 22%.
Related publications
i) NCR Comments: Ratings for Swedish savings banks unchanged after Swedbank's revised dividend policy, 29 Jan. 2025.
ii) Sörmlands Sparbank long-term issuer rating raised to 'A-'; Outlook stable, 2 Oct. 2024.
iii) 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- |
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@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.