Nordic consumer banks' saw increased credit losses and marginal declines in earnings, but most maintained strong capital generation and cost efficiency in the third quarter, according to a report published by Nordic Credit Rating (NCR) today in its review of nine Nordic consumer banks.
We continue to see challenges for the sector. Low deposit growth in the Nordic countries and Europe is increasing competition and funding costs for Nordic consumer banks. In addition, the proportion of loans showing increasing signs of weakness is increasing and banks continue to indicate that payment patterns could be at risk as economic conditions worsen.
"We believe that interest rates are near their peak and could begin to fall in 2024. However, higher living costs and interest rates are expected to maintain loan-loss provisions at elevated levels through 2024," said NCR credit analyst Sean Cotten. "Margins remain under pressure from increased competition in a stagnant deposit market, though a shift in product mix towards higher-margin loans and credit cards has resulted in stable margins for the sample as a whole."
Contacts:Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com research Sector comment NCR_-_Nordic_consumer_banks_increase_credit_losses.pdf (372.42 KB) Financial ALL ALL Financial Off