Nordic Credit Rating (NCR) has affirmed its 'A' long-term issuer rating on Norway-based savings bank SpareBank 1 Østfold Akershus. The outlook is stable. The 'N2' short-term rating, 'A' senior unsecured issue rating, 'A-' Tier 2 issue rating and 'BBB' additional Tier 1 issue rating have also been affirmed, in accordance with NCR's revised financial institutions rating methodology. The ratings are no longer under criteria review.
Rating rationale
The affirmation reflects SB1 Østfold Akershus' continued stable performance, strong profitability and moderate risk appetite. In the first nine months of 2025, the bank reported risk-adjusted earnings of 3.7%. We expect this ratio to decline slightly but remain strong for the sector at 3.3–3.4% through our forecast period to 2027, resulting in a return on equity well above the bank's revised target of 11%.
SB1 Østfold Akershus, along with other savings banks, received a significant boost to capital ratios from CRR3, with a reported estimated impact of approximately 2pp. We expect that the bank will use this additional capital to support growth and also distribute some to shareholders, to slim down capitalisation. The bank has announced an extra dividend of NOK 10 per share, or NOK 124m in total, to be paid in Dec. 2025, and we also anticipate an additional extra dividend next year, in addition to the 50% payout ratio policy. Combined with expected loan growth of around 10% over our forecast period, these factors have led us to revise our capital assessment downward.
The rating also continues to reflect the growth prospects of SB1 Østfold Akershus' core markets, its solid asset quality metrics—despite a modest deterioration in recent years amid weaker economic conditions—and its relationship-based funding profile. Membership in the Sparebank 1 Alliance supports business diversity, operating efficiency and liquidity. The rating remains constrained by high competition in the bank's operating region, geographic concentration in the loan book and uncertainty in the commercial real estate sector.
Stable outlook
The outlook is stable, reflecting our view that SB1 Østfold Akershus is likely to maintain solid profitability and capital generation as the bank increases focus on growth. While we believe the weakened economy will take some time to fully recover, we expect gradual improvements in the bank's asset quality metrics. The outlook also reflects our expectation that the bank will slim its capitalisation through growth and potential extraordinary dividends, but that it will maintain an adequate buffer to regulatory requirements.
An upgrade is unlikely at this time, given earnings and capitalisation are already strong.
We could lower the rating to reflect a Tier 1 ratio under 18% over a protracted period, or a CET1 ratio within 2pp of regulatory requirements. We could also lower the rating to reflect a material deterioration in the regional operating environment that negatively affects asset quality, or increased competition leading to lower profitability and a weaker market position.
| 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: | A- | A- |
| Additional Tier 1 issue rating: | BBB | BBB |
Contacts:
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@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.