Nordic Credit Rating (NCR) has affirmed its 'BBB+' long-term issuer rating on Norway-based Voss Veksel- og Landmandsbank ASA (Vekselbanken). The outlook is stable. The 'N2' short-term issuer rating, the 'BBB+' senior unsecured issue rating, the 'BBB' issue rating on the bank's Tier 2 instrument and the 'BB+' issue rating on the bank's Additional Tier 1 instrument were also affirmed.
Rating rationale
Our 'BBB+' long-term issuer rating on Vekselbanken reflects the bank's strong earnings and capital position and low risk appetite. We have revised our assessment of the bank's capital position, expecting it to maintain a consolidated Tier 1 ratio around 22% through 2028. In addition, the bank has reported consistently low credit losses and a stable share of non-performing loans in recent years. We expect this strong performance to continue to reflect the bank's high share of retail loans and robust underwriting and have adjusted our assessment of its loss performance. We expect the bank to sustain strong earnings metrics through 2028, supporting capital generation as it targets residential loan growth in the Bergen metropolitan area over the coming years. We have also calibrated our view of the bank's funding and liquidity given the bank's relatively low share of liquid assets to customer deposits among its savings bank peer group.
The rating is constrained by the bank's geographic concentration in the relatively rural local economy of the bank's core market, resulting in a high proportion of real-estate collateral in the Voss region. The rating is also constrained by strong competition from the bank's main owner, Voss Sparebank, and the two banks' largely shared customer base.
Stable outlook
The stable outlook reflects our view that Vekselbanken will maintain strong earnings and capitalisation through 2028. We expect the bank's cost efficiency to remain favourable relative to similarly sized peers, while preserving its robust asset quality. The bank's strong capital position is expected to support loan growth in the coming years, partly through its expansion to retail customers in the metropolitan area of Bergen.
We could raise our rating on Vekselbanken to reflect improved scale and diversification, while maintaining a Tier 1 ratio above 22%. We could also raise the rating to reflect a sustained improvement in liquidity buffers.
We could lower our rating to reflect a material deterioration in the local operating environment that negatively affects asset quality; a consolidated Tier 1 capital ratio sustainably below 18% or pre-provision income to consolidated risk exposure amount below 2% for a protracted period.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB+ | BBB+ |
| Outlook: | Stable | Stable |
| 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:
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 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.