Strong capitalization. Robust earnings capacity. Strong regional brand. Expected continued close ties with major shareholder, Swedbank AB. Concentration risk due to small size and narrow market focus. Small size relative to main competitors. Standard&Poor's Ratings Services' outlook on Sweden-based Swedbank Sjuhärad AB is stable, reflecting our expectation that the bank will be able to offset weaker economic development in Sweden with its robust earnings capacity and ability to build capital through retained earnings. In our base-case forecast, we expect impairment losses will rise in 2013 and 2014, but remain below our normalized loss level of Swedish krona (SEK) 69 million annually (about 46 basis points of net loans). The outlook also reflects our view that close cooperation with
