“SEB has one of Europe’s strongest balance sheets and we are active in Europe’s most stable markets. Our customers are healthy and well prepared even for a more uncertain economic situation,” Jan Erik Back, SEB’s Chief Financial Officer, says.
“I am particularly pleased that Moody’s recognises the stability we have shown over time as a leading corporate bank. It is unique in an international perspective that we, as a corporate bank, get to keep our rating in this economic environment.”
Moody’s on 15 February said they would review European banks’ credit ratings. They cited systemic worries as a result of the European debt crisis. In Sweden, Moody’s said it would review all four large banks and Landshypotek, an institution that provides financing to farmers and forest owners.
Moody’s has so far announced credit rating cuts for around 50 Spanish, Italian and Portuguese banks. Today, Moody’s announced the results of a review of Swedish banks, with three downgrades: Nordea, Handelsbanken and Landshypotek. SEB and Swedbank keep their ratings.
Still, all Swedish banks have relatively high ratings. After the review, Handelsbanken’s and Nordea’s ratings are still one notch above SEB’s, while Swedbank’s remain one notch lower than SEB’s. Moody’s says the outlook is stable for all four banks.
“In the uncertain economic environment around us, the Swedish economy it significantly more stable than in many other parts of Europe. The Swedish banking system is robust and even with the new ratings, we as a system have a very strong position in Europe,” Back says.
Over the past three years, SEB has strengthened its core tier one capital ratio to 13.9 per cent from 8.6 per cent at the beginning of 2009. The ratio is a key metric when measuring a bank’s ability to withstand credit losses and market turmoil. Impaired loans have come down by 11 billion Swedish kronor, or 39 per cent, since 2009 as the Baltic economies have stabilised. Credit losses in the Nordic credit portfolio have averaged 7 basis points since 2000.
“Our funding costs are among the lowest in Europe and our refinancing situation is very comfortable,” Back says.