Nordic Credit Rating (NCR) has affirmed its 'BBB+' long-term issuer rating on Norway-based savings bank Trøndelag Sparebank. The outlook is negative. The 'N2' short-term issuer rating, 'BBB+' senior unsecured issue ratings, 'BBB' Tier 2 issue rating, and 'BB+' Additional Tier 1 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 Trøndelag Sparebank 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 negative outlook on the ratings on Trøndelag Sparebank.
Negative outlook
The negative outlook reflects our uncertainty about the adequacy of Trøndelag Sparebank's current loan-loss provisions given the bank's strong growth and high level of non-performing loans. It also reflects shortcomings in the bank's risk management. In addition, it reflects the possibility that profitability is insufficient to finance the bank's growth ambitions of 10% annually. Such expansion would likely lead to weakened capitalisation and reduced loss absorbing capacity.
We could lower the rating to reflect increased loan losses and lack of improvement in asset quality, a Tier 1 ratio below 19% for a protracted period, or risk-adjusted earnings metrics below 2% of pre-provision income to risk exposure amount on a lasting basis.
We could revise the outlook to stable to reflect improved asset quality (as evidenced by reduced loan losses and/or non-performing loans), a Tier 1 ratio sustainably above 19%, pre-provision income to risk exposure amount sustainably above 2%, and cost-to-income below 60%.
Related publications
i) Trøndelag Sparebank outlook revised to negative; 'BBB+' long-term issuer rating affirmed, 05 May 2025.
ii) Nordic Credit Rating publishes amended Financial Institutions Rating Methodology, 12 May 2025.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB+ | BBB+ |
| Outlook: | Negative | Negative |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | BBB+ | BBB+ |
| Tier 2 issue rating: | BBB | BBB |
| Additional Tier 1 issue rating: | BB+ | BB+ |
Contacts:
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Christian Yssen, analyst, +4740019900, christian.yssen@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.