Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Sweden-based savings bank Sparbanken Mälardalen AB. The outlook is stable. The 'N2' short-term issuer rating has also been affirmed, as has the 'A-' senior unsecured instrument rating. The Tier 2 'BBB+' instrument rating has been withdrawn, as the sole instrument has been called and we do not anticipate a new one.
Rating rationale
The affirmation reflects our view that the merged bank will perform broadly in line with our previous expectations. Sparbanken Mälardalen was formed on 1 Sep. 2025 through the merger of Sparbanken Rekarne AB and Sparbanken Västra Mälardalen, creating one of Sweden's largest savings banks. We expect the bank to focus on profitable growth, leveraging its increased scale to improve cost efficiency and strengthen its competitive position in core markets.
We have revised our assessment of the bank's capitalisation upward, as we expect its Common Equity Tier 1 (CET1) ratio to strengthen over our forecast period (26–27% in 2026–2028), supported by strong earnings and moderate growth, despite dividend payouts above the policy minimum. Following a review of the merged bank's risk management framework, we have strengthened our risk governance assessment. We also consider that material downside risks to asset quality metrics have abated, which has improved our view of the bank's loss performance.
The long-term issuer rating also reflects the bank's strong competitive position, relationship-based funding profile, and benefits from cooperation with Swedbank AB. These strengths are partially offset by the bank's concentrated exposure to a core market with weaker economic fundamentals, as well as its exposure to the local real estate sector and larger individual counterparties.
Stable outlook
The outlook is stable, reflecting our view that the merged bank will leverage improved economies of scale to achieve sustainable growth within its low to moderate risk appetite and gradually strengthen its cost efficiency. We do not anticipate a material economic downturn as a result of current global turmoil, but note that the bank's region is heavily exposed to the manufacturing industry. We expect the bank to maintain strong asset quality metrics, though loan book concentrations are likely to remain around current levels.
We could raise the rating to reflect improved economic conditions in the regional operating environment, combined with improved cost efficiency and proven economies of scale benefits, with a cost-income ratio below 50% on a sustainable basis.
We could lower the rating to reflect a CET1 ratio below 18% over a protracted period, or materially worsened regional operating environment, limiting growth prospects and/or negatively affecting asset quality. We could also lower the rating to reflect an increased risk appetite in the loan book or funding profile.
Related rating actions
(i) Sparbanken Mälardalen AB 'A-' long-term issuer rating affirmed following merger and name change; Outlook stable, 1 Sep. 2025.
(ii) Sparbanken Västra Mälardalen long-term issuer rating raised to 'A-' and withdrawn following merger with Sparbanken Rekarne, 1 Sep. 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:
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 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.