Nordic Credit Rating (NCR) said today that Swedish savings banks show no signs of asset quality deterioration in their 2020 reports. Despite initial increases in credit loss provisions, the savings banks reported similarly low provisions of 4bps in 2020 as in 2019 and nonperforming loans continued to decline to only 39bps. In addition, the banks took advantage of increased deposits and a hot housing market to increase lending volumes and continue to repatriate mortgage loans from Swedbank AB.
In a report published today, the credit rating agency said that a boost from Swedbank dividend payments should support further growth, improve already strong capital positions and provide an additional buffer against struggling customers for most savings banks.
"While there is still the potential for late-cycle loan losses and margin pressure amid low interest rates, the banks will have plenty of additional capital thanks to the return of Swedbank dividends," said NCR credit analyst Sean Cotten.
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