Nordic Credit Rating (NCR) said today that Swedish savings banks are well positioned to meet the challenges of 2021 given strong capitalisation and improved cost efficiency. The Swedish Finance Department expects banks to pursue restrictive dividend policies and is awaiting EU guidance, however, NCR expects Swedbank AB to pay dividends again in 2021, boosting revenues for most banks in the sector.
In a report published today, the agency said the sector had outperformed its earlier credit loss expectations in the first nine months of 2020. However, NCR added that it expects 2021 to see higher actual credit losses rather than credit loss provisions based on economic projections, as has been the case in 2020.
"We believe that Swedish savings banks will face margin pressure during 2021 due to flat interest rates," said NCR credit analyst Sean Cotten. "However, we expect them to increase lending and reduce costs to support earnings, and remain well capitalised."
If you have any questions, please contact:
Sean Cotten, chief rating officer, +46735600337, firstname.lastname@example.org
Geir Kristiansen, credit rating analyst, +4790784593, email@example.com