19 Mar 2015 15:50

Positive outlook for SEB credit rating upgrade

Rating agency Moody's has a positive outlook on SEB's long-term credit rating and may upgrade it one notch to Aa3 before the summer. Moody's on Wednesday unveiled the results of its global credit rating review, which was based on a new method.

“This is further confirmation that the market has a growing confidence in our ability to create long-term stability and grow our customer base while improving profitability," said SEB’s Chief Financial Officer Jan Erik Back.

Moody's review, which covers 1,021 banks, came partly as the result of a new rating method, but also because the rating agency wanted to evaluate the effects of a new EU directive on crisis management for banks. The new directive means that the implicit government guarantee, which Moody's assumed applied to banks earlier, is now scaled down considerably.

Moody’s says SEB is under review for an upgrade. This means that if nothing unexpected happens, they will upgrade SEB one notch to Aa3 before the end of June. The reason for the positive outlook is a combination of what SEB has accomplished on its own and Moody's new methodology. Those two factors outweigh the de-escalation of the implicit government guarantee.

From an international perspective, Swedish banks already have some of the world's highest credit ratings and that will continue to be the case.

“It looks like Moody's will make an assessment where SEB on its own merits reinforces the credit rating, which in turn increases the chances for broad and cost-effective borrowing from the market. We have diligently worked towards a higher credit rating for a long time. It reflects the stability of our business model and our ambition to create long-term value based on strong customer relationships,” says Jan Erik Back.