Swedbank Sjuharad AB

Strong capitalization. Expected continued close ties with major shareholder, Swedbank. Robust earnings capacity. Concentration risk due to regional operations and narrow market focus. Small size relative to main competitors. Small domestic market share. The negative outlook on Sweden-based Swedbank Sjuhärad AB reflects that S&P Global Ratings could lower its ratings on the bank withinits two-year outlook horizon if the negative trends it sees for Sweden's economic risk caused it to revise down its anchor for banks operating in Sweden to 'bbb+' from 'a-'. In addition, we could take a negative rating action if Swedbank Sjuhärad's ties with its largest shareholder, Swedbank AB, weakened considerably or if Swedbank Sjuhärad was unable to maintain capital in line with our forecast. This could

...Small domestic market share. Outlook: Negative The negative outlook on Sweden-based Swedbank SjuhSrad AB reflects that S&P Global Ratings could lower its ratings on the bank withinits two-year outlook horizon if the negative trends it sees for Sweden's economic risk caused it to revise down its anchor for banks operating in Sweden to '###+' from 'a-'. In addition, we could take a negative rating action if Swedbank SjuhSrad's ties with its largest shareholder, Swedbank AB, weakened considerably or if Swedbank SjuhSrad was unable to maintain capital in line with our forecast. This could happen, for example, if lending growth outpaced capital accumulation, or if the bank incurred materially higher losses. We could revise the outlook to stable if we considered that the trend for economic risks affecting the Swedish banking sector had stabilized. A positive rating action is unlikely because we consider an improvement of other bank-specific factors to be remote at present....

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