The ratings on Sweden-based Swedbank AB reflect the bank's important domestic market position, its large customer base, and wide distribution network. They also reflect the low-risk profile of its domestic operations, its high systemic importance in Sweden, and its improved funding composition and duration. These strengths are partly offset by the risk of earnings volatility due to Swedbank's non-Nordic exposures, the bank's heavy reliance on wholesale funding, and its relatively weak cost efficiency. Our recent revision of Swedbank's stand-alone credit profile (SACP) to 'a-' from 'bbb+' reflects our opinion that the bank's funding profile has improved and that its credit risks have decreased. It is our view that Swedbank has increased stable funding components and is gradually prolonging the maturity
