Nordic Credit Rating has affirmed its 'A-' long-term issuer rating on Sweden-based savings bank Sparbanken Alingsås AB. The outlook is stable. The 'N2' short-term issuer rating and the 'A-' senior unsecured issue ratings have also been affirmed.
Rating rationale
The affirmation reflects our view that the bank will continue to strengthen its capital position to over 40% common equity Tier 1 (CET1) ratio by end-2027, supported by robust core earnings, projected dividends from Swedbank shareholdings, and low credit losses around 5bps per year. The bank noted a decline in corporate lending in the first quarter of 2026 and is expected to grow moderately in 2026 as a result. We have maintained our assessment of the bank's performance indicators, but have revised our view of loss performance upward due to very strong asset quality metrics. Conversely, we have revised our view of earnings downward, reflecting reduced pre-provision capital generation and weaker cost efficiency relative to peers, with pre-provision income projected at 2.1–2.2% and a cost-to-income ratio around 57%.
In addition, the bank has demonstrated access to capital markets and a significant improvement in liquid assets in recent years, resulting in a positive revision of our assessment of its funding and liquidity. Cash and fixed income assets now represent nearly 38% of customer deposits, almost double the level three years ago. The bank can also divest Swedbank shares to generate additional liquidity if needed. The bank continues to transfer a large share of mortgage loans to Swedbank, maintaining its on-balance-sheet loans at 89% of customer deposits.
Figure 1. Sparbanken Alingsås key credit metrics, 2022–2028e
% | 2022 | 2023 | 2024 | 2025 | 2026e | 2027e | 2028e |
Net interest margin | 1.5 | 2.6 | 2.2 | 1.7 | 1.6 | 1.6 | 1.6 |
Core pre-provision income/REA | 2.2 | 3.8 | 3.4 | 2.4 | 2.2 | 2.2 | 2.1 |
Core cost-to-income | 50.5 | 40.4 | 45.2 | 54.6 | 57.2 | 57.4 | 57.5 |
Return on ordinary equity | 7.0 | 8.6 | 9.0 | 7.2 | 7.4 | 6.8 | 6.5 |
Loan losses/net loans | 0.08 | 0.14 | -0.09 | -0.06 | 0.03 | 0.05 | 0.05 |
Net Stage 3/net loans | 0.28 | 0.20 | 0.21 | 0.18 | 0.19 | 0.19 | 0.19 |
CET1 ratio | 24.5 | 29.6 | 34.3 | 39.2 | 38.4 | 40.1 | 41.4 |
Source: company and NCR. e–estimate. All metrics adjusted in line with NCR methodology. Core represents net interest income and net fee & commission income.
The rating reflects the bank's strong capitalisation, moderate risk appetite, solid competitive position, and relationship-based funding. The bank's cooperation with Swedbank AB is viewed positively, as it provides product diversification, shared IT costs, and access to retail mortgage financing. The rating is constrained by the bank’s higher single-name concentrations and significant exposure to corporate and commercial real estate loans, compared with savings bank peers with greater residential mortgage exposure. The rating also reflects risks associated with property values. Following two strong years, the bank is expected to report weaker cost efficiency.
Stable outlook
The stable outlook reflects our expectation that Sparbanken Alingsås will offset weakened net interest margins with loan growth, spurred by its new branch in Partille, a municipality adjacent to Gothenburg. It also incorporates our expectation that the bank will maintain its solid competitive position and that the regional economy, which has strong links to Gothenburg, will perform in line with or better than the national economy. We expect Sparbanken Alingsås to improve on its strong capital ratios with loan growth around 5% per annum given steady core earnings and contributions from Swedbank dividends.
We could raise the rating to reflect a material reduction in single-name concentration risks in the loan book and improved core earnings metrics to above 3% and core cost efficiency below 45% on a sustainable basis.
We could lower our rating on Sparbanken Alingsås to reflect a deteriorating operating environment, reduced asset quality, increased risk in the loan or liquidity portfolios, or a sustained decline in the common equity Tier 1 capital ratio to below 20%.
| 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, lead senior analyst, +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.