Skandinaviska Enskilda Banken AB (publ)...The stable outlook on Skandinaviska Enskilda Banken AB...

Skandinaviska Enskilda Banken AB(publ)

Primary Credit Analyst:

Salla von Steinaecker, Frankfurt (49) 69-33-999-164; [email protected]

Secondary Contact:

Antonio Rizzo, Madrid (34) 91-788-7205; [email protected]

Research Contributor:

Arianna Valezano, London + 44 20 7176 3838; [email protected]

Table Of Contents

Major Rating Factors

Outlook

Rationale

Related Criteria

Related Research

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 30, 2018 1

Skandinaviska Enskilda Banken AB (publ)

SACP a

Anchor a-

Business

PositionAdequate 0

Capital and

EarningsStrong +1

Risk Position Adequate 0

Funding Average

0

Liquidity Adequate

+ Support +1

ALACSupport +1

GRE Support 0

GroupSupport 0

SovereignSupport 0

+AdditionalFactors 0

Issuer Credit Rating

A+/Stable/A-1

Resolution Counterparty Rating

AA-/--/A-1+

Major Rating Factors

Strengths: Weaknesses:

• Large Nordic corporate and financial institutions

business franchise.

• Strong risk-adjusted capitalization underpinned by

stable earnings.

• Sound asset quality and low loan losses in the

corporate and retail loan portfolio.

• Concentration of comparably large single-name

exposures.

• Somewhat lower cost efficiency than domestic

peers, but improving.

• Domination of funding profile by wholesale funding

and corporate deposits.


Outlook: Stable

The stable outlook on Skandinaviska Enskilda Banken AB (publ) (SEB) reflects our view that the bank will maintain

resilient earnings and risk-adjusted capital (RAC) above 10% over the next two years as Sweden benefits from a

benign economic environment and the domestic housing market adjusts to higher housing stock volumes and

stricter amortization requirements for new residential mortgages.

We also anticipate that SEB will build a considerable additional loss-absorbing capacity (ALAC) buffer in the

coming years as it fulfills its minimum requirements for own funds and eligible liabilities (MREL), likely by

replacing a large share of senior unsecured debt with senior subordinated debt instruments through 2022. As such,

we believe that SEB's ALAC buffer will eventually exceed 5% of S&P Global Ratings' risk-weighted assets (RWAs)

and therefore we already incorporate one notch of ALAC support into our ratings on SEB.

We could lower our ratings on SEB if excessive payouts or loan growth result in our projected RAC ratio declining

below 10%, or if we expect that the issuance of ALAC-eligible instruments will total less than 5% of RWAs over the

ramp-up period until 2022.

While we see limited upside for our ratings in the next two years, we could raise our ratings on SEB if the bank

continues to demonstrate the resilience of its business model and stable revenues and maintains its financial profile

and creditworthiness in line with those of higher-rated peers.

Rationale

The ratings on SEB are underpinned by the stable and low-risk operating environment in Sweden, where the bank

mainly operates, as well as the bank's stable revenue base and leading position among large Nordic corporates. The

sound market shares in both corporate banking and household mortgages support the bank's profitability,

counterbalancing its somewhat lower operating efficiency compared to that of Nordic peers. The ratings are also

supported by SEB's strong capitalization, mirrored in our projected RAC ratio on the bank of above 10% over the next

two years.

We believe that our capital model adequately captures the underlying risks of SEB's credit exposures in its primary

markets and that SEB has a good level of provisioning. We also expect the bank to maintain its sound underwriting

standards, mirrored in a stable and low cost of risk, in line with that of other Nordic banks. SEB's funding and liquidity

have been improving over the past three years, since the bank has been actively working on extending the duration of

the stable funding sources and has improved its funding mismatches. We expect the bank to maintain sound funding

and liquidity metrics and good access to the capital markets even in distressed times.

We now view the supportiveness of the Swedish government toward private-sector commercial banks as uncertain.

Given the MREL that the Swedish National Debt Office set for SEB in December 2017, we expect that SEB will build

up significant ALAC over the next two-to-four years and that its the buffer will eventually exceed 5% of RWAs.

Therefore, we now include a one-notch uplift into the ratings.



Anchor: 'a-', reflecting blended economic risks in SEB's core market and industry risk in Sweden

Our bank criteria use our Banking Industry Country Risk Assessment (BICRA) economic risk and industry risk scores

to determine a bank's anchor, the starting point in assigning an issuer credit rating. The anchor for SEB is 'a-', in line

with the anchor we use for banks operating only in Sweden, based on an economic risk score of '2' and an industry risk

score of '3'. As approximately 10% of SEB's lending exposure (see chart 1) is to countries with relatively strong

economic environments, such as Germany and the Nordic countries, and only 10% to higher-risk countries in the

Baltics, the blended economic risk score does not affect our anchor for SEB.

Chart 1

We view the Swedish economy as highly diverse and competitive, with considerable and demonstrated monetary and

fiscal flexibility, given a historical focus on prudent management of public finances. We believe that high property

valuations, along with high and increasing household and private-sector debt, have contributed to material economic

imbalances. Nevertheless, making use of macro-prudential tools, Sweden now mandates amortization on new

residential mortgages, and will also require further amortization from March 2018 for high debt-to-income levels.

Combined with significant increases in the supply of housing in the past two years and in the pipeline for the next few

years, we now anticipate that house prices will recalibrate, contracting by 7%-10% from August 2017 highs, similar to

what occurred as a result of the external shocks in 2008-2009 and 2011-2012. In addition, we believe that projected



increases of around 100 basis points (bps) in the repurchase (repo) rate through 2019 should, combined with a high

share of variable-rate loans, constrain the worsening of existing imbalances in Sweden over the coming years.

Household incomes remain high, and households' net financial assets and high savings continue to be supportive to

our assessment of economic risks. In addition, we expect that banks' credit losses and nonperforming loans (NPLs) will

remain low in the low-interest-rate environment.

In our view, the high net external indebtedness of Sweden's banking sector is a key risk factor. However, core

customer deposits have increased due to high savings rates from the private sector, meaning that close to 40% of

domestic loans are to corporate and retail depositors. Banks are filling the resulting funding gap largely with domestic

covered bonds and international senior debt. We view the regulatory environment in Sweden as in line with that of

other EU countries, noting the comparatively high capital buffer requirements and a history of capital and liquidity

support to the sector. We also view the relative stability of the banking sector and absence of significant complexity as

sector strengths.

Table 1

Skandinaviska Enskilda Banken AB (publ) Key Figures

--Year-ended Dec. 31--

(Mil. SEK) 2018* 2017 2016 2015 2014

Adjusted assets 2,513,937.0 2,235,675.0 2,199,086.0 2,107,407.0 2,259,152.0

Customer loans (gross) 1,514,091.0 1,420,081.0 1,367,806.0 1,288,759.0 1,277,428.0

Adjusted common equity 114,119.7 110,766.0 105,476.0 109,986.0 101,495.0

Operating revenues 22,690.0 45,610.0 43,251.0 45,050.0 43,954.0

Noninterest expenses 10,936.0 21,938.0 21,812.0 22,187.0 22,143.0

Core earnings 10,053.6 17,886.3 14,645.4 17,510.8 16,885.4

*Data as of June 30. SEK--Swedish krona.

Business position: Universal bank with a leading Nordic commercial banking franchise

Our assessment of SEB's business position is based on the bank's sound Nordic franchise supporting stable revenues

across a broad range of business lines. This is exemplified by the bank's focus on large corporates and financial

institutions across the Nordics and in Germany, which underscores the diversity of SEB's revenue sources.

SEB had total assets of Swedish krona (SEK) 2,818 billion as of June 30, 2018 (approximately €270 billion) and has a

leading position among large Nordic corporates, which generally enables it to generate steady profits from a variety of

services. The bank also remains focused on a broad retail strategy, mainly in Sweden and the Baltics, through its

wholly owned subsidiaries. In addition, the bank provides private customers with wealth management services in the

Nordics. As of June 2018, SEB had SEK1,838 billion of assets under management. As a result, SEB's net interest

income as a share of revenues is lower than its Nordic peers' and it derives 35%-40% of its revenues from fee and

commission income.



Chart 2

We consider that the diversified income streams support SEB's business position. Increased scale and efficiency

improvements via cost controls led to a reported cost-to-income ratio of 48% as of June 30, 2018, closer to the ratios

of more efficient Nordic peers and ahead of most European banks. The bank plans to maintain a nominal cost cap of

SEK22 billion to prioritize efficiency gains, which we believe will continue to support its strengthened earnings profile.

Given SEB's commercial banking traditions, the bank's main focus has been on a steady stream of fee-based revenues,

and as a result, the bank earns about 40%-45% of its pre-provision profits from its large corporate and financial

institutions division. Corporate and retail banking, serving various small and midsize customers and private customers,

accounts for 30%-35% of profits, and the remaining 20% of profits comes from wealth management, life insurance, and

the Baltics division. Much of the noninterest income is generated from recurring business lines such as custody, mutual

funds, payments, and lending-related activities. Furthermore, given SEB's emphasis on relationship banking services,

its market-making activity focuses on providing clients with liquidity, and, as such, trading income relates to

customer-driven business as opposed to proprietary trading.

As a result of SEB's longstanding relationships with large corporate entities, the bank dominates the corporate deposit

market with a 23.0% market share, whereas it trails its primary peers within the household deposits market with an

11.5% share. Within the Swedish domestic lending market, SEB has approximately 14% of the household mortgage

market, and as such, shares the No. 3 position with Nordea Bank AB. SEB continues to hold sound market shares in

the Baltics in terms of both customer loans and deposits (Lithuania 29%/27%; Estonia 25%/22%; and Latvia



18%/12%, respectively).

SEB's management has maintained a stable business strategy focusing on a stable return on equity (ROE), which, over

the longer term, equates to an ROE of 15%. This is complemented by a policy of maintaining a management buffer of

at least 150 bps of common equity tier 1 (CET1) capital relative to the Swedish Financial Supervisory Authority's CET1

capital requirements. As of June 30, 2018, the reported ROE stood at 13.9%, compared to 11.5% at the end of 2017,

and the bank had an approximately 260 basis-point buffer relative to the CET1 requirement of 16.7% on June 30, 2018.

SEB has achieved this by focusing on core operations, which has served the bank well, leading to asset-quality

improvements and better cost efficiency. Furthermore, we note that Investor AB--which holds a 20.8% stake in SEB

and is the bank's largest shareholder--provides ongoing stability, and, alongside SEB's founding family, the

Wallenbergs, has been a major shareholder since 1856.

Table 2

Skandinaviska Enskilda Banken AB (publ) Business Position


(%) 2018* 2017 2016 2015 2014

Loan market share in country of domicile 14.3 14.2 14.4 14.3 14.6

Deposit market share in country of domicile 15.9 15.6 15.7 15.6 15.3

Total revenues from business line (SEK mil.) 27,196.0 45,610.0 43,771.0 45,050.0 46,936.0

Commercial banking/total revenues from business line 33.1 40.2 43.4 40.8 38.6

Retail banking/total revenues from business line 36.1 42.9 41.9 35.4 34.8

Commercial & retail banking/total revenues from business line 69.2 83.1 85.3 76.2 73.4

Insurance activities/total revenues from business line N/A N/A 13.1 11.0 10.2

Asset management/total revenues from business line 11.0 13.4 N/A 11.2 10.5

Other revenues/total revenues from business line 19.8 3.5 1.6 1.7 5.9

Return on average common equity (%) 19.8 11.4 7.5 12.0 14.9

*Data as of June 30. N/A--Not applicable. SEK--Swedish krona.

Capital and earnings: Stable earnings generation is supportive of strong capital levels

Our assessment of SEB's capital and earnings as strong mainly reflects our expectation that the RAC ratio will remain

above 10% over the next 24 months, compared with 10.3% at year-end 2017. We expect that SEB's stable earnings

profile will support capital generation to enable further growth along with strong risk-adjusted capitalization. Over the

past few years, SEB's capital has improved as a result of operating efficiency improvements and low credit losses.

Alongside the bank's additional tier 1 capital instrument issuance, the capital base has strengthened considerably.

We forecast that SEB's RAC ratio will be about 10.0%-10.5% over the next 18-24 months, supported by expected

earnings of about SEK18 billion-SEK19 billion per year. Underpinning this forecast is lending growth of about 4%-5%,

which is driven by both the corporate and retail loan books and which is broadly in line with the market growth rate.

We expect that SEB will maintain the improving trend of its cost-to-income ratio, which has been on average slightly

below 50% for the past five years.

Coupled with its focus on steady profit growth across its diversified product offerings, SEB has seen solid returns, and

we expect our three-year average earnings buffer, which measures the capacity of a bank's earnings to cover



normalized losses, to improve to near 1.50%. The bank also has a long-term ROE target of about 15%, which is in line

with that of its Nordic peers. Our RAC forecast incorporates our view that the bank will continue to pay out

approximately 70%-75% of its profits (compared to a dividend target ratio of 40% or above), which provides additional

equity capital flexibility in the event of a downturn.

We include both of SEB's additional tier 1 instruments totaling SEK15,255 billion in our assessment of total adjusted

capital, our measure of loss-absorbing capital. We do not include any additional hybrid capital issuance in our capital

projections for SEB. However, the ratios could be further supported by additional issuance over the next two years.

We expect that the RAC ratio will be further supported by SEB's commitment to maintaining a management buffer of

150 bps of CET1 capital above the Swedish regulatory requirements. At the end of second quarter of 2018, the excess

CET1 capital was about 260 bps over the regulatory capital requirement of 16.7%.

Table 3

Skandinaviska Enskilda Banken AB (publ) Capital And Earnings


(%) 2018* 2017 2016 2015 2014

Tier 1 capital ratio 21.7 21.6 21.2 21.3 19.5

S&P Global Ratings' RAC ratio before diversification N/A 10.3 9.9 10.1 9.1

S&P Global Ratings' RAC ratio after diversification N/A 10.2 9.6 10.7 9.8

Adjusted common equity/total adjusted capital 88.2 88.8 87.7 88.8 88.4

Double leverage N.M. 48.3 49.9 53.6 59.4

Net interest income/operating revenues 46.2 43.6 43.3 42.2 45.4

Fee income/operating revenues 39.7 38.9 38.4 37.5 37.1

Market-sensitive income/operating revenues 10.5 11.3 11.9 11.0 6.6

Noninterest expenses/operating revenues 48.2 48.1 50.4 49.2 50.4

Preprovision operating income/average assets 0.9 0.9 0.8 0.9 0.9

Core earnings/average managed assets 0.7 0.7 0.6 0.7 0.7

*Data as of June 30. RAC--Risk-adjusted capital. N/A--Not applicable. N.M.--Not meaningful.

Table 4

Skandinaviska Enskilda Banken AB (publ) Risk-Adjusted Capital Framework Data

(Mil. SEK) Exposure*

Basel III

RWA

Average Basel III

RW (%)

S&P Global

RWA

Average S&P

Global RW (%)

Credit risk

Government and central banks 354,927 16,540 5 10,011 3

--

Institutions and CCPs 164,713 33,376 20 39,838 24

Corporate 951,195 331,504 35 668,260 70

Retail 683,145 81,090 12 222,040 33

Of which mortgage 581,154 42,273 7 148,928 26

Securitization§ 8,918 1,060 12 2,921 33

Other assets† 8,168 12,541 154 9,870 121

Total credit risk 2,171,066 476,111 22 952,940 44



Table 4

Skandinaviska Enskilda Banken AB (publ) Risk-Adjusted Capital Framework Data (cont.)

Credit valuation adjustment

Total credit valuation adjustment -- 6,767 -- 23,636 --

Market risk

Equity in the banking book 3,266 3,266 100 25,828 791

Trading book market risk -- 38,794 -- 70,051 --

Total market risk -- 42,060 -- 95,879 --

Operational risk

Total operational risk -- 48,219 -- 139,593 --

(Mil. SEK)

Basel III

RWA

S&P Global

RWA

% of S&P Global

RWA

Diversification adjustments

RWA before diversification 609,846 1,212,048 100

Total diversification/concentration

adjustments

-- 5,087 0

RWA after diversification 609,846 1,217,135 100

(Mil. SEK)

Tier 1

capital Tier 1 ratio (%)

Total adjusted

capital

S&P Global RAC

ratio (%)

Capital ratio

Capital ratio before adjustments 132,555 21.7 124,688 10.3

Capital ratio after adjustments‡ 132,555 21.7 124,688 10.2

*Exposure at default. §Securitization exposure includes the securitization tranches deducted from capital in the regulatory framework. †Other

assets includes Deferred Tax Assets (DTAs) not deducted from ACE. ‡Adjustments to Tier 1 ratio are additional regulatory requirements (e.g.

transitional floor or Pillar 2 add-ons). RWA--Risk-weighted assets. RW--Risk weight. RAC--Risk-adjusted capital.SEK--Sweden Krona. Sources:

Company data as of Dec. 31, 2017, S&P Global.

Risk Position: Continued focus on core markets in the Nordic countries and Germany

Generally, we consider SEB's overall asset quality and loss experience to be in line with those of its Nordic peers and

our assessment of SEB's operating environment. While economic imbalances represent an area of concern for Sweden,

we believe that the bank's anchor adequately captures this.



Chart 3

SEB's credit risk profile is representative of its core markets in the Nordics, which include both the corporate and the

household and residential real estate sectors, and in Germany, where the focus is now solely on corporates. The

underlying risks for SEB's nonfinancial corporate exposures (49% of total loans) and retail exposures (36% of total

loans)--amounting to SEK1,654 billion as of June 2018--reflect the characteristics of the bank's primary markets.

We anticipate that credit losses will remain stable at fairly low levels in the next two years. For 2018-2019, we project

that loan-loss provisions will represent about 9-10 bps of lending, a level consistent with SEB's performance over the

past several years, after low levels of 6 bps in 2017 and 4 bps in the first half of 2018. We continue to believe that

future credit losses will be more balanced between Nordic and non-Nordic exposures, as SEB's asset quality continues

to improve in the Baltic countries and in Germany. We believe that the bank has an adequate level of provisions for its

outstanding exposures, underpinned by NPL coverage of around 55% following the implementation of International

Financial Reporting Standard 9.

SEB has made progress in its strategy to concentrate on its core businesses, which highlights the bank's sound risk

appetite. The focus on core businesses and relationships has also lowered SEB's earnings volatility. Furthermore, we

note that many of the bank's longstanding relationships are with large and high creditworthy Nordic corporates, and

while this leads to some single-name concentration, the customer selection is supportive of SEB's credit profile. SEB's



actual losses have been well below our normalized credit loss level for the past eight years, which is a calculation of

long-term average annualized credit-related losses over the credit cycle.

Table 5

Skandinaviska Enskilda Banken AB (publ) Risk Position


(%) 2018* 2017 2016 2015 2014

Growth in customer loans 11.3 3.8 6.1 0.9 5.3

Total diversification adjustment/S&P Global Ratings' RWA before diversification N/A 0.4 2.6 (6.3) (7.6)

Total managed assets/adjusted common equity (x) 24.7 23.1 24.8 22.7 26.0

New loan loss provisions/average customer loans 0.04 0.06 0.07 0.07 0.11

Net charge-offs/average customer loans 0.11 0.08 0.10 0.16 0.18

Gross nonperforming assets/customer loans + other real estate owned 0.58 0.58 0.56 0.62 0.83

Loan loss reserves/gross nonperforming assets 67.6 54.1 62.7 60.8 58.1

*Data as of June 30. N/A--Not applicable. RWA--Risk-weighted assets.

Funding and liquidity: SEB's funding profile is less dependent on wholesale funding as it has morecorporate deposits than peers

In our view, SEB's funding profile has strengthened over the past few years as the bank has worked to extend the

duration of its stable funding sources. This also supports the bank's liquidity management. We view positively that SEB

is less dependent on wholesale funding compared with its domestic peers owing to its stable base of corporate

deposits. We continue to assess funding as average and liquidity as adequate, broadly in line with our assessments for

its peers.



Chart 4

SEB has improved its funding mismatches over the past several years, having made a concerted effort to lengthen its

debt maturity profile. As of June 2018, SEB's S&P Global Ratings-adjusted stable funding ratio (SFR) equaled 100%,

and we expect that it will remain nearly balanced at 100% in the next 24 months. SEB remains focused on regulatory

requirements that we expect to be effective as of 2021. We view funding as neutral to our ratings on SEB.

SEB's liquidity reserve, which we valued at SEK556 billion as of June 30, 2018, is primarily invested in high-quality

liquid assets, including Nordic and German government, state-guaranteed, supranational, and covered bonds, to

ensure a low-risk profile for the portfolio. As such, these assets contributed to SEB's one-year liquidity ratio--which

compares broad liquid assets with short-term wholesale funding--of 1.2x as of June 30, 2018. This is a noticeable

improvement from the past, and we anticipate SEB will maintain coverage above 1x, supported by regulatory

requirements. As of June 2018, SEB reported a regulatory liquidity coverage ratio of 136% in line with the EU

definition, well above the minimum requirement of 100%.



Table 6

Skandinaviska Enskilda Banken AB (publ) Funding And Liquidity


(%) 2018* 2017 2016 2015 2014

Core deposits/funding base 52.0 54.8 52.5 51.5 50.5

Customer loans (net)/customer deposits 134.7 147.1 143.1 148.1 138.5

Long-term funding ratio 75.1 82.5 81.5 78.6 75.9

Stable funding ratio 99.7 100.2 102.7 94.8 95.7

Short-term wholesale funding/funding base 26.6 19.0 20.0 23.2 25.8

Broad liquid assets/short-term wholesale funding (x) 1.2 1.3 1.3 1.1 1.0

Net broad liquid assets/short-term customer deposits 9.6 7.8 11.7 3.3 0.8

Short-term wholesale funding/total wholesale funding 54.6 41.4 41.4 47.1 51.4

Narrow liquid assets/3-month wholesale funding (x) 1.7 2.1 2.2 1.6 1.4

*Data as of June 30.

External support: One notch of support due to expected MREL-related issuance

We currently include one notch of support above SEB's 'a' stand-alone credit profile (SACP) as we expect that the bank

will build meaningful ALAC over the ramp-up period of four years, which will protect the bank's senior bondholders.

With the implementation of the EU's Banking Recovery and Resolution Directive (BRRD) in Sweden at the end of

2017, we now view government support as being uncertain and consider that the country now has an effective

resolution regime. See "Swedish Bank Ratings Affirmed Amid Housing Market Transformation; Five Outlooks Revised

To Stable," published Nov. 24, 2017, for further details.

The Swedish FSA, acting as the resolution authority, has published a bank-specific MREL in December 2017. The

domestic systemically important banks such as SEB will need to meet the MREL with subordinated liabilities by 2022.

While we await further details on legislation that will clarify the structure of such subordinated liabilities, we note that

SEB has made public its issuance plans for meeting the MREL. The bank expects to issue approximately SEK30 billion

of senior resolution notes per year from 2019 in order to achieve the estimated SEK90 billion it needs. As such, we

anticipate that SEB's ALAC buffer will eventually exceed 5% of RWAs by 2020, compared with our estimate of 1.8% as

of year-end 2017.

Ratings on hybrid instruments

We rate SEB's non-deferrable subordinated debt instruments 'BBB+', two notches below the bank's SACP. The rating

reflects our view of the debt's contractual subordination as a tier 2 instrument and that BRRD is equivalent to a

contractual write-down clause.

Related Criteria

• Criteria - Financial Institutions - General: Methodology For Assigning Financial Institution Resolution Counterparty

Ratings, April 19, 2018

• Criteria - Financial Institutions - General: Risk-Adjusted Capital Framework Methodology, July 20, 2017

• General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017



• Criteria - Financial Institutions - Banks: Bank Rating Methodology And Assumptions: Additional Loss-Absorbing

Capacity, April 27, 2015

• Criteria - Financial Institutions - Banks: Bank Hybrid Capital And Nondeferrable Subordinated Debt Methodology

And Assumptions, Jan. 29, 2015

• General Criteria: Group Rating Methodology, Nov. 19, 2013

• Criteria - Financial Institutions - Banks: Quantitative Metrics For Rating Banks Globally: Methodology And

Assumptions, July 17, 2013

• Criteria - Financial Institutions - Banks: Banks: Rating Methodology And Assumptions, Nov. 9, 2011

• Criteria - Financial Institutions - Banks: Banking Industry Country Risk Assessment Methodology And Assumptions,

Nov. 9, 2011

• General Criteria: Use Of CreditWatch And Outlooks, Sept. 14, 2009

• Criteria - Financial Institutions - Banks: Commercial Paper I: Banks, March 23, 2004

Related Research

• Banking Industry Country Risk Assessment Update: October 2018, Oct. 27, 2018

• Nordic Banks Sport Strong Capital--And It's Not Likely To Soften, Oct. 17, 2018

• Nordic Bank Ratings Continue To Stand Tall, Aug. 16, 2018

• 24 European Banking Groups Assigned Resolution Counterparty Ratings, June 29, 2018

• The Resolution Story For Europe's Banks: The Clock Is Ticking, April 25, 2018

• Second Chapter Of Nordic Resolution Regimes Approaches An End, But The Book Is Not Complete, Feb. 14, 2018

• Swedish Bank Ratings Affirmed Amid Housing Market Transformation; Five Outlooks Revised To Stable, Nov. 24,

2017

• Banking Industry Country Risk Assessment: Sweden, Nov. 24, 2017



Anchor Matrix

Industry

Risk

Economic Risk

1 2 3 4 5 6 7 8 9 10

1 a a a- bbb+ bbb+ bbb - - - -

2 a a- a- bbb+ bbb bbb bbb- - - -

3 a- a- bbb+ bbb+ bbb bbb- bbb- bb+ - -

4 bbb+ bbb+ bbb+ bbb bbb bbb- bb+ bb bb -

5 bbb+ bbb bbb bbb bbb- bbb- bb+ bb bb- b+

6 bbb bbb bbb- bbb- bbb- bb+ bb bb bb- b+

7 - bbb- bbb- bb+ bb+ bb bb bb- b+ b+

8 - - bb+ bb bb bb bb- bb- b+ b

9 - - - bb bb- bb- b+ b+ b+ b

10 - - - - b+ b+ b+ b b b-

Ratings Detail (As Of October 30, 2018)


Issuer Credit Rating A+/Stable/A-1

Resolution Counterparty Rating AA-/--/A-1+

Commercial Paper

Foreign Currency A-1

Senior Unsecured A+

Short-Term Debt A-1

Subordinated BBB+

Issuer Credit Ratings History

02-Dec-2015 Foreign Currency A+/Stable/A-1

20-Nov-2012 A+/Negative/A-1

01-Dec-2011 A+/Stable/A-1

02-Dec-2015 Local Currency A+/Stable/A-1

20-Nov-2012 A+/Negative/A-1

01-Dec-2011 A+/Stable/A-1

Sovereign Rating

Sweden AAA/Stable/A-1+

*Unless otherwise noted, all ratings in this report are global scale ratings. S&P Global Ratings’ credit ratings on the global scale are comparable

across countries. S&P Global Ratings’ credit ratings on a national scale are relative to obligors or obligations within that specific country. Issue and

debt ratings could include debt guaranteed by another entity, and rated debt that an entity guarantees.




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