Sparbanken Sjuharad AB

Strong capitalization. Close ties with major shareholder, Swedbank, which we expect will continue. Robust earnings capacity. Concentration risk due to regional operations and narrow market focus. Small size relative to main competitors. Small domestic market share. S&P Global Ratings' stable outlook on Swedish Sparbanken Sjuhärad reflects our view that the economic risk trend in Sweden is now stable, and the Swedish banking sector is likely to remain resilient despite modest house price decreases. It also reflects that Sparbanken Sjuhärad will maintain its established business position, with close ties to Swedbank, and our expectations that the bank's capital and earnings will remain very strong within the next two years. We could lower our ratings if Sparbanken Sjuhärad's ties with Swedbank weakened

...Small domestic market share. Outlook: Stable S&P Global Ratings' stable outlook on Swedish Sparbanken SjuhSrad reflects our view that the economic risk trend in Sweden is now stable, and the Swedish banking sector is likely to remain resilient despite modest house price decreases. It also reflects that Sparbanken SjuhSrad will maintain its established business position, with close ties to Swedbank, and our expectations that the bank's capital and earnings will remain very strong within the next two years. We could lower our ratings if Sparbanken SjuhSrad's ties with Swedbank weakened considerably, or if Sparbanken SjuhSrad's capital decreased materially, below our 15% threshold, due to higher-than-expected losses or outpacing lending growth. In addition, rating could come under pressure if the bank's overall risk position deteriorated, with an nonperforming loan (NPL) ratio considerably higher than the average for Nordic peers, and top-20 exposures as a share of total adjusted capital increasing...

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