Swedbank AB

Retail banking market leader in Sweden, with a large customer base and wide distribution network. Strong risk-adjusted capital levels, reflecting the low risk profile of domestic operations. Strong earnings capacity. More concentrated exposure to its domestic market than peers. Greater reliance on wholesale funding than international peers. Sluggish loan growth in Baltic markets. Standard&Poor's Ratings Services' stable outlook on Sweden-based Swedbank AB reflects that we are likely to remove both the downward transitional notch and our one notch of government support by year-end 2015--thereby keeping the ratings at their current level--if we believe there is a greater likelihood that senior unsecured creditors could incur losses if the bank fails. We could lower the ratings on Swedbank if the

...Sluggish loan growth in Baltic markets. Outlook: Stable Standard & Poor's Ratings Services' stable outlook on Sweden-based Swedbank AB reflects that we are likely to remove both the downward transitional notch and our one notch of government support by year-end 2015--thereby keeping the ratings at their current level--if we believe there is a greater likelihood that senior unsecured creditors could incur losses if the bank fails. We could lower the ratings on Swedbank if the bank significantly increases the use of short-term funding for long-term assets (as measured by our ratios), leading to a deterioration of its funding and liquidity position. We could revise our assessment of Swedbank's stand-alone credit profile (SACP) downward if, contrary to our current expectation, the bank is unable to maintain a risk-adjusted capital (RAC) ratio sustainably above 10%, our threshold for a "strong" capital and earnings assessment. We consider a positive rating action remote at this stage, but believe...

Full Report