Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Norway-based savings bank SpareBank 1 Gudbrandsdal. The outlook is stable. The 'N2' short-term issuer rating, 'A-' senior unsecured issue rating and 'BBB+' Tier 2 rating have also been affirmed, in accordance with NCR's revised financial institutions rating methodology. The bank has not issued Additional Tier 1 instruments, but we expect to rate such instruments at 'BBB-' if it chooses to do so. 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 SpareBank 1 Gudbrandsdal 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. Consequently, we have affirmed our ratings and maintained the stable outlook on the ratings on SpareBank 1 Gudbrandsdal.
We have revised our capital assessment to reflect significant improvements in capital ratios, with the CET1 ratio at 22.3% as of 30 Jun. 2025, and a larger buffer above regulatory capital requirements. The improved assessment reflects that the bank has benefited from the implementation of the EU's Capital Requirements Regulation III (CRR3), given its substantial proportion of low loan-to-value residential mortgage loans. Despite material one-off gains in 2025, we have also revised our earnings assessment to reflect our expectation of a higher operating cost-to-income ratio in our forecast, at about 50%.
Stable outlook
The stable outlook reflects SpareBank1 Gudbrandsdal's low risk appetite, strong real estate collateral, and improved earnings, which we believe will enable resilience to a moderate slowdown in the economy. Moreover, we expect moderate loan growth in the course of our forecast period through 2027.
We could raise the rating to reflect stronger economic conditions and asset quality relative to those of peers, and improved capital and earnings metrics. We could lower the rating to reflect a lasting reduction in the consolidated Tier 1 capital ratio to below 20% or risk-adjusted earnings metrics sustainably below 2% of risk exposure amount. We could also lower the rating to reflect a material deterioration in the operating environment or increased risk appetite that negatively affects asset quality.
i) SpareBank 1 Gudbrandsdal assigned 'A-' long-term issuer rating; Outlook stable, published 3 Mar. 2025.
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:
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Christian Yssen, analyst, +4740019900, christian.yssen@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.