Nordic Credit Rating (NCR) has assigned an 'A' long-term issuer rating to Norway-based SpareBank 1 Helgeland (SB1 Helgeland). The outlook is stable. An 'N2' short-term issuer rating has also been assigned, together with an 'A' senior unsecured issue rating, an 'A-' Tier 2 issue rating and a 'BBB' Additional Tier 1 rating.
In addition, we have assigned an 'A' long-term rating on Helgeland Boligkreditt and 'AAA' issue rating on Helgeland Boligkreditt's covered bonds.
Rating rationale
The long-term issuer rating reflects the bank's strong market position in core markets and profitability, solid capital adequacy management and diverse funding access. The bank is part of the SpareBank 1 Alliance, which we view as supportive of business diversity, operating efficiency and liquidity. The bank demonstrates strong pre-provision profitability, supported by robust net interest margins, solid contributions from non-interest income through the SB1 Alliance and effective cost management. SB1 Helgeland is primarily a retail bank providing low-risk residential mortgages but also has some exposure to more cyclical and higher-risk corporate segments typical of the Helgeland region.
Through its wholly owned covered bond company, Helgeland Boligkreditt, the bank has additional funding access of residential mortgage loans through covered bonds, distinguishing it from most other Norwegian savings banks. The issuer credit rating and instrument ratings of Helgeland Boligkreditt reflect our assessment of its parent, SB1 Helgeland.
The rating is constrained by elevated loss provisions and a relatively high proportion of non-performing loans compared with peers. It is also limited by geographic concentration in Helgeland in Nordland County, a dispersed region with demographic trends weaker than domestic averages.
Stable outlook
The stable outlook reflects our expectation that the bank's robust earnings, solid capitalisation, diversified funding profile and strong liquidity will offset elevated corporate credit losses. We expect the bank to gradually resolve its largest problem exposures and improve asset quality through 2028. We also expect the bank to maintain a prudent risk appetite, including moderate loan growth and broadly stable capital ratios over the forecast period. The outlook further reflects the bank to maintain its strong market position in Helgeland.
An upgrade is unlikely at this time, given earnings and capitalisation are already strong.
We could lower the rating to reflect asset quality development weaker than our projections, a Tier 1 ratio below 19% over a protracted period or weakened regional economic prospects.
| Rating list | Rating |
|---|---|
| Long-term issuer credit rating: | A |
| Outlook: | Stable |
| Short-term issuer credit rating: | N2 |
| Senior unsecured issue rating: | A |
| Tier 2 issue rating: | A- |
| Additional Tier 1 issue rating: | BBB |
Contacts:
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Sean Cotten, lead senior analyst, +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.