Nordic Credit Rating has assigned a 'BBB+' long-term issuer rating to Norway-based Strømmen Sparebank. The outlook is stable. An 'N2' short-term issuer rating has also been assigned, together with an 'BBB+' senior unsecured issue rating, a 'BBB' Tier 2 issue rating and a 'BB+' Additional Tier 1 rating.
Rating rationale
The long-term issuer rating reflects the bank's strong earnings, robust capital position and strong growth prospects in core markets. The bank demonstrates access to capital market financing and few single-name concentrations. We consider the bank's risk governance and internal risk reporting as appropriate for its size and complexity. The bank has a cooperation agreement with the Eika alliance, which we view as positive, as it provides product diversity, shared development costs and the opportunity to finance residential retail mortgages through Norwegian covered bond issuer Eika Boligkreditt.
The rating is constrained by the bank’s concentrated exposure to real estate in the Romerike region, adjacent to Oslo. It also reflects stiff competition in the greater Oslo area and the bank’s limited market share.
Stable outlook
The stable outlook reflects our expectation that Strømmen Sparebank will maintain stable pre-provision income and projections of improving asset quality. The bank's moderate risk appetite, robust real estate collateral and strong capital position support its resilience to a modest economic slowdown. We forecast the bank to maintain robust capital ratios following improvements from implementing the EU's Capital Requirements Regulations III (CRR3) last year.
We could raise the rating to reflect a stronger market position in Romerike, pre‑provision income to risk‑exposure amount (REA) sustainably above 3% and reduced concentrations in the loan book.
We could lower the rating to reflect a Tier 1 capital ratio below 18% over a protracted period, a material weakening of asset quality, including a sustained increase in Stage 3 loans, or a loan-to-deposit ratio above 150%.
| Rating list | Rating |
|---|---|
| Long-term issuer credit rating: | BBB+ |
| Outlook: | Stable |
| Short-term issuer credit rating: | N2 |
| Senior unsecured issue rating: | BBB+ |
| Tier 2 issue rating: | BBB |
| Additional Tier 1 issue rating: | BB+ |
Contacts:
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Sean Cotten, lead senior analyst, +46735600337, sean.cotten@nordiccreditrating.com
The methodology documents used for this rating are NCR's Rating Principles published on 14 Feb. 2024, NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024 and NCR's Financial Institutions Rating Methodology published on 12 May 2025. For the full regulatory disclaimer please see the rating report.