Swedish savings banks face increasing economic uncertainty on the back of a strong performance in 2024, according to a report published by Nordic Credit Rating (NCR) today. Although net interest margins peaked in 2023, growth was stable and capitalisation remained strong in 2024. Many banks saw a decrease in loss provisions due to an improving economic outlook.
"Strong earnings, supported by dividends from Swedbank for most of our sample banks have bolstered capital ratios" said NCR credit analyst Ylva Forsberg. "However, poor profitability in transferred mortgages and rising joint IT costs will likely remain areas of contention between the savings banks and Swedbank."
While the Swedish economy remains relatively stable, global economic uncertainty has accelerated in recent weeks. While we believe the savings banks have a solid foundation from which to manage this uncertainty, loan growth in 2025 may be lower than our earlier expectations.
Contacts:
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com