Nordic Credit Rating (NCR) has assigned a 'BBB+' long-term issuer rating to Sweden-based savings bank Sparbanken i Karlshamn. The outlook is stable. At the same time, NCR assigned an 'N3' short-term issuer rating as well as 'BBB+' issue ratings to Sparbanken i Karlshamn's senior unsecured bonds.
Rating rationale
The long-term issuer rating reflects the bank's moderate risk appetite, strong capitalisation, solid competitive position and relationship-based funding profile. The bank has a relatively high share of retail mortgages on-balance for a Swedish savings bank, 54% as of 31 Dec. 2025, and a history of strong asset quality, with an average share of net Stage 3 loans of 0.4% between 2021-2025. We view the bank's cooperation with Swedbank AB as positive, as it offers greater product diversity, shared IT costs and access to retail mortgage financing.
The rating is constrained by the bank’s relatively high single-name concentrations in its loan book and its exposure to a region with limited growth prospects. Although risks in the Swedish property management sector have moderated after recent volatility, the bank remains inherently concentrated in the local real estate market, leading to a sensitivity towards local property values.
Stable outlook
The stable outlook reflects our expectation that Sparbanken i Karlshamn will maintain a moderate risk appetite while pursuing growth in line with the market. Although we expect Swedbank to continue paying dividends over the coming years, we consider the bank's reliance on these earnings as a weakness in our assessment. The outlook also reflects our expectation that asset quality will remain solid and that capitalisation will be maintained at strong levels.
We could raise the rating to reflect improved growth prospects in the bank's targeted area. We could also raise the rating to reflect reduced single-name concentrations in the loan book, combined with improved core earnings, with core cost-to-income below 55% over a protracted period.
We could lower the rating to reflect a deteriorating operating environment leading to reduced regional growth, asset quality and collateral values. We could also lower the rating to reflect a common equity Tier 1 (CET1) ratio below 20% over a protracted period, or worsened asset quality in larger corporate exposures.
| Rating list | Rating |
|---|---|
| Long-term issuer credit rating: | BBB+ |
| Outlook: | Stable |
| Short-term issuer credit rating: | N3 |
| Senior unsecured issue rating: | BBB+ |
Contacts:
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
The methodology documents used for this rating are NCR's Rating Principles published on 14 Feb. 2024, NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024 and NCR's Financial Institutions Rating Methodology published on 12 May 2025. For the full regulatory disclaimer please see the rating report.