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Swedish banks wave S&P credit rating downgrade threats to the background

Wednesday, 21 November 2012
The Swedish major banks are taking the threats from the credit rating organisation, Standard and Poor’s (S&P), to place them on a negative outlook with relaxation noting that such a threat is not “for them,” according to Handelsbanken’s press officer Henrik Westman.

Yesterday, Standard & Poor’s (S & P), placed 8 Swedish banks including the big ones on “negative” outlook from “stable” and that they could face a possible down grade in their credit rating should the Swedish economic situation continue the way it is.
This came after the bleak Swedish economy, which seems to deteriorate faster than expected and structural imbalances that might ensure led S & P to feel that there is an increased risk for the banking sector.

But the four major Swedish banks are not worried about the fall out from S&P. SEB think they have prepared for any scenario.
“Our strong resistance is manifested among other things in the loan loss ratio which is below 10 basis points (0.1 percent) in terms of the entire loan portfolio, “says SEB’s communications director Viveka Hirdman-Ryrberg.

Swedbank agree with the view of S & P that the Swedish economy has weakened. But no visible effects is seen in the Bank’s operations including the cost of borrowing.

“The first signs of a real economic weakening are clear in our business, but we are doing a good third quarter… We see a positive trend with a decline in borrowing costs, “said Swedbank Communications Thomas Backteman.

Handelsbanken and Nordea are not alarmed by the news.
“Our third quarter was the best ever and we borrow cheaply. We really have no comment on that lowers outlook. It is left for them and their analysts. It’s good that they follow us, “said Handelsbanken’s press officer Henrik Westman.

“This reflects their view of the Swedish economy. It has nothing to do with us, “said Nordea Press Officer Erik Durhan.

S & P’s analysis comes just a month after the major Swedish banks reported strong quarterly numbers.

S & P said that they have seen an increasing number of corporate bankruptcies and layoffs, while households are highly leveraged. The real estate market, according to S & P also under pressure.
by Scancomark.com Team

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