Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Norway-based savings bank Sparebank 68° Nord. The outlook is stable. The 'N2' short-term issuer rating, 'A-' senior unsecured issue ratings, and 'BBB+' Tier 2 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
NCR has reviewed its long-term and short-term issuer ratings, issue ratings, and outlook on Sparebank 68° Nord 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, and that there have not been significant changes in its overall risk profile. Consequently, we have affirmed our ratings and maintained the stable outlook on the ratings on Sparebank 68° Nord.
Stable outlook
The stable outlook reflects Sparebank 68° Nord's low risk appetite, strong real-estate collateral, improved earnings and strong cost efficiency, which we believe will enable resilience during a modest economic slowdown. We forecast moderate loan growth in 2025 and 2026 and expect capital ratios will remain robust. Moreover, we anticipate a boost in capital ratios resulting from the implementation of the EU's Capital Requirements Regulations III (CRR3).
We view an upgrade as unlikely at this time, given the bank's regional and sectoral concentrations.
We could lower our rating on the bank to reflect a cost-to-income ratio above 50% over a protracted period, a sustained reduction in the Tier 1 capital ratio to below 20%, or a material deterioration in the local operating environment or weakening asset quality.
Related publications
i) Sparebank 68° Nord assigned 'A-' long-term issuer rating; Outlook stable, 13 Feb. 2025.
ii) Nordic Credit Rating publishes amended Financial Institutions Rating Methodology, 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:
Christian Yssen, analyst, +4740019900, christian.yssen@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.