Sparbanken Sjuharad AB

The stable outlook on Sparbanken Sjuhärad indicates that, in the next 12 to 24 months, the bank will maintain its established business position, with close ties to Swedbank supporting its high-cost efficiency. This will allow the bank to continue offering local customers the services of a universal bank and satisfy regional credit demand. In our base case, we expect the bank to maintain its RAC ratio above 15% and to sustain its ample liquidity buffers over the next two years. We could lower our rating if a material change in economic conditions meaningfully hampers the bank's capitalization beyond our current base-case expectations, and its projected RAC ratio trends below 15%. The rating could also come under pressure if the bank's

...The Swedbank partnership will continue to support Sparbanken SjuhSrad's credit profile and local business operation. Sparbanken SjuhSrad's strong regional position and close relationship with Swedbank underpin its earnings generation. The small size of Sparbanken SjuhSrad and historical ties to Swedbank mean the latter can provide support by equipping the bank with lending and savings products, IT infrastructure, funding, and short-term liquidity, if necessary. We consider that this long-standing partnership will remain in place as it supports Sparbanken SjuhSrad's earnings capacity and efficiency gains. We expect Sparbanken SjuhSrad will maintain its solid capital position which we consider a key rating strength. We forecast earnings will remain strong in 2024 before gradually edging down over the next two years in tandem with falling policy rates and high IT and development spending. We project net income of Swedish krona (SEK) 450-SEK460 (40 million-41 million) in 2024, compared with...

Full Report