Lower credit rating for major Swedish banks but SEB and Swedbank smile for now

lowered credit ratings and on Thursday, it was expected that a definitive answer would come knocking.

At midnight, Thursday to Friday, the Swedish daily, Dagens Nyheter, said sources familiar with the paper had said that Nordea and Handelsbanken in the day received notice from the institution that their long – term credit rating would be downgraded by one step in the ten grade scale, from the third best Aa2 to Aa3.

For those banks that receive a downgraded credit rating, it would mean that it becomes more expensive to borrow money, and the effect is that they risk getting fewer and fewer investors seeking to do business with them.

At the beginning of last week  26 Italian banks saw their credit rating down graded by between one and four steps and a few days later, the Spanish banking sector suffered the same fate when 16 banks' credit ratings were lowered.

Some analysts have already determined that banks would seek to compensate for their higher costs as such might turn customers away.

While rating agencies have set junk status in many southern European financial firms because of the States' own problems, the Swedish government's strong public finances meant that the Swedish banking market has been regarded as strong by international standards.

According to Moody's, however, both SEB and Swedbank ratings will remain high and thus would not be decrease.
Landshypotek, which works to finance investments in agriculture and forestry, also saw its rate lower by two grade points.
By Scancomark.se Team