Nordic Investment Bank

The stable outlook reflects S&P Global Ratings' view that, in the next 24 months, NIB will continue to fulfil its mandate through the credit cycle, and that its robust risk management policies will ensure high credit quality on its lending book. We also expect the bank to maintain extensive support from its shareholders, endorsing its mandate and enabling strong internal capital generation. We could lower the rating if, contrary to our expectations, NIB's relevance diminished, shareholder support weakened, or loosening governance substantially eroded the bank's capital base through higher dividend distributions. Also, a material deterioration in asset quality and less robust liquidity policies could pressure NIB's financial standing and lead to a lower rating. One key pillar of NIB's mandate

...Nordic Investment Bank (NIB) has been increasing its relevance as it expands lending to its Baltic members and the importance of its environmental mandate in line with changing market dynamics. While the institution has a niche focus of lending to the private sector mainly in Nordic countries, it has increased lending to the Baltic member countries, which we believe supports its enterprise risk profile. At the same, in 2021, NIB published a new sustainability policy, in which the bank effectively banned direct financing of fossil fuel-based energy generation. It also disbursed its first sustainability linked loans in 2021 to support borrowers' transition strategies. NIB has a robust financial risk profile, based on an extremely strong capital position and strong funding and liquidity. The bank's risk-adjusted capital (RAC) ratio was 24.2% as of fiscal year 2021 and we expect it to stay above 23% in the next year on the back of sound retained earnings. Asset quality remains high with an...

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