FINANCIAL INSTITUTIONS
Skandiabanken Norge
ISSUER IN-DEPTH
Creditworthiness Driven By Very
Strong Asset Quality and Sound
Profitability
27 AUGUST 2015
RATINGS
Summary
Skandiabanken Norge
BCA
baa1
Adjusted BCA
baa1
On 21 August 2015 we assigned A3/Prime-21 first-time deposit ratings and a baa1 Baseline
Credit Assessment (BCA) to Skandiabanken AB Filial Norge, the Norwegian branch of Sweden's
Deposit Ratings (long and short-term)A3/
P-2
Skandiabanken AB (A2 negative, baa12 ). The parent company no longer has a strategic interest
in the Norwegian market and is therefore evaluating the sale of Skandiabanken Norge via an IPO
CR Assessment (long and short-term) A1(cr)/
P-1(cr)
Source: Moody's
later this year3 . On 26 August we assigned provisional Aaa ratings to the covered bonds that will
be issued by Skandiabanken Norge's covered bond company.4
KEY FIGURES:
2012
2013
2014
Total Assets
27.4
44.0
52.4
Lending
26.7
43.5
51.1
Deposits
35.0
37.8
42.4
Skandiabanken Norge's creditworthiness is driven by:
»
Outstanding
0.5
8.7
15.7
Debt
Source: Skandiabanken Norge financial statements
All figures in NOK billion
well with other Nordic peers that are owned by insurance companies5 . At the same
time, the bank is less profitable than Nordic mortgage providers that also lend to the
corporate sector, which is a higher risk-return business. Still, we expect some reduction
in profitability across the entire Norwegian banking system over the next year as the
central bank keeps interest rates at historically low levels to stimulate the economy.
ANALYST CONTACTS
Jan Skogberg
4420-7772-1319
Analyst
[email protected]
Effie Tsotsani
4420-7772-1712
Analyst
[email protected]
Alexander Zeidler
44-20-7772-8713
VP-Senior Credit Officer
[email protected]
Profitability that compares well with peers, helped by good efficiency.
Skandiabanken Norge is a small and profitable online mortgage lender operating in
Norway. Skandiabanken Norge operates more efficiently and is hence far more profitable
- net income accounted for 0.6% of tangible banking assets last year - than its breakeven Swedish banking parent. Skandiabanken Norge's profitability metrics also compare
»
Very strong asset quality despite aggressive lending growth. Asset quality is very
strong - the bank has almost no problem loans in its lending book - and is unlikely to
deteriorate significantly over the next 18 months, even with the prospect of a weaker
economic backdrop, as we expect real GDP growth to more than halve to 1% in 20156 .
Skandiabanken Norge has stringent underwriting standards - mortgagors must be able
to cope with a minimum 10% interest rate - and they typically only borrow about 55%
of the value of the home, meaning they have significant equity in their property, and
therefore a strong incentive to keep up with payments. In addition, generous government
benefits normally run for approximately two years in the event of unemployment.
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
»
Capitalisation is adequate in relation to risk although capital injections from parent will not be forthcoming in
the future. The bank is currently not subject to individual regulatory capital requirements, owing to its status as a branch of
Skandiabanken AB. However, this will change in October, when the business will be converted into a subsidiary of Skandia
Insurance Company Limited before the potential IPO. Our understanding is that the Skandia insurance group will ensure that the
Norwegian bank’s capitalisation is on par with other Norwegian banks from then on.
»
Funding consists of stable retail deposits but we expect that wholesale funding will play a more prominent role in the
future. Up to now Skandiabanken Norge's has been largely retail deposit funded. We expect more confidence sensitive market
funding to feature more prominently in the future funding structure because of its cost effectiveness.
»
Mortgage orientated business model lacks diversification. Skandiabanken Norge’s monoline business structure constrains its
credit profile as it makes the bank almost entirely reliant on interest income from home loans. However, any strategic shift under
potentially new ownership towards unsecured or corporate lending could hurt asset quality.
»
A large cushion of bail-in-eligible debt protects depositors against loss in a currently unlikely failure scenario. We
expect the Norwegian bank to be subject to an operational resolution regime. Depositors benefit from a bail-in-eligible cushion
of liabilities, assuming a currently unlikely failure scenario, under our advanced loss-given-failure analysis. The likelihood of
government support is low.
»
Covered bonds are backed by a ring-fenced cover pool which consists of high quality assets. The bank applies a strict
affordability test which requires mortgagors to cope with a minimum 10% interest rate. Moreover, the current average loan-tovalue is low at 54%. In addition, nonperforming loans are removed from the cover pool.
Skandiabanken Norge is expected to be sold in Q4 2015 because it no longer plays a strategic role
within the Skandia insurance group
In January 2015 the Swedish insurance and banking group Skandia announced that it was evaluating a sale of its Norwegian banking
operation later this year, thus allowing the group to focus on strengthening efficiency and profitability of its Swedish banking business.
The Swedish bank plays a key role within the wider Skandia insurance group as it cross-sells banking services to Skandia’s insurance
customers. However, Skandia has no strategic need to maintain a bank in Norway as it has no insurance customers there.
Profitability compares well with peers, helped by good efficiency
Skandiabanken Norge is a profitable online-only mortgage lender that has been a direct beneficiary of Norway’s decade-long housing
boom, which has kept demand for loans high, and reported a net income accounting for 0.6% of tangible banking assets (TBA) at year
end-2014.
However, we expect there will be some reduction in profitability growth across the Norwegian banking sector though over the next
year as the central bank is likely continue to keep interest rates low. Monetary policy is likely to stay extremely accommodative until
the economy strengthens, and Norway’s growth engine, the oil sector, is unlikely to pick up again as long as the oil price remains weak.
We forecast the price of Brent Crude to increase only very gradually, not reaching USD70 per Barrel before in 20187 .
With a 17.2% return on equity at year-end 2014 (see Exhibit 1), Skandiabanken Norge’s profitability metrics compare very favourably
with other Nordic mortgage lenders that are owned by insurance companies, such as Sweden’s Lansforsakringar Bank (A1 stable,
baa1) and Norway’s KLP Banken (covered bonds rated Aaa) and Storebrand Bank (Baa1 stable, baa3), whose return on equity has
not exceeded 10% in recent years, per Moody's calculations. The above banks, in our view, were set up to support an insurance
business even though the price of that mandate might be subdued profitability. Skandiabanken Norge has never operated under such a
constraint because Skandia has no insurance business in Norway.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on
www.moodys.com for the most updated credit rating action information and rating history.
2
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
Exhibit 1
Skandiabanken Norge average return on equity (%)
Source: Skandiabanken AB
Skandiabanken’s Norwegian banking business is far more profitable than the Swedish banking business. The former reported a
SEK205 million profit for H1, 2015, on total lending of SEK55.8 billion. In comparison, the Swedish business (excluding the Norwegian
operation) reported a small loss for the same time period (SEK44.6 billion in lending at 31 June 2015). This long-standing profitability
gap is the result of a far more efficient Norwegian operation. The Swedish business reported a 101% cost-to-income ratio for H1 2015,
up from 98% ratio six months earlier. By contrast, the equivalent ratio for the Norwegian business was 48% at 30 June 2015 compared
to 45% at year end-2014 (see Exhibit 2).
We expect the Swedish business to remain unprofitable for two reasons; (i) the Swedish banking business exists to support Skandia’s
insurance customers and such a mandate lends itself to weaker profitability, and (ii) the bank has not yet outlined how it intends to
improve profitability, although it aims to focus on efficiency in Sweden after the Norwegian banking business has been sold.
Exhibit 2
Skandiabanken Norge cost-to-income (%)
Source: Skandiabanken AB
3
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
Very strong asset quality despite aggressive lending growth
Skandiabanken Norge’s very strong asset quality underpins its credit metrics, and we have calculated that problem loans over gross
lending never exceeded 0.2% during the past three years, which is very low, even by Nordic standards. We consider it unlikely for the
asset quality to deteriorate significantly over the next 18 months, even with the prospect of a weaker economic backdrop, as we expect
GDP growth to more than halve to 1% in 2015.
Exhibit 3
Skandiabanken Norge Outstanding Lending (NOK billion)
Source: Skandiabanken Norge
Risks can arise following the rapid lending growth in Norway over the past two years, with gross lending for Skandiabanken Norge
up 16% during 2014 alone (see Exhibit 3). Generally speaking, such a high growth rate typically exposes a bank to less stringent
underwriting, although in the case of Skandiabanken Norge we have not seen evidence of that. In addition, we do not expect the bank's
lending growth to be as aggressive in the coming years, as that would require frequent capital injections and these are less likely to be
forthcoming if the Norwegian bank is sold to a diverse investor base.
Skandiabanken Norge’s asset quality is insensitive to our base scenario which assumes a slowdown in house price appreciation over the
next 18 months (see our Banking System Outlook ). We do not expect a significant increase in non-performing loans over that period
because (i) the lender attaches strict affordability requirements to mortgage lending, requiring mortgagors to afford to pay a minimum
10% interest rate, (ii) the average loan-to-value ratio was only 55% at 30 June 2015, meaning that mortgage holders have substantial
equity invested in their properties and therefore a particularly strong incentive to pay their mortgages, and (iii) a generous government
funded social security system typically ensures that mortgagors are able to meet their obligations for up to two years in the event
of unemployment. However, we would expect any slump in property prices to be followed by a confidence shock, a consumption
slowdown and an increase in unemployment, which would expose corporate and unsecured retail lending to higher default rates, and
would limit business volumes, and hence income.
Capitalisation is adequate in relation to risk although capital injections from parent will not be
forthcoming in the future
Skandiabanken Norge is adequately capitalised against unexpected losses, which we expect to remain at low levels given the bank’s
focus on secured mortgage lending. Our calculated leverage ratio was 4.9% at 30 June 2015 and that is comparable with Nordic peers,
including banks that assume more credit risk in the form of corporate lending.
The bank is currently not subject to a separate regulatory capital requirement, owing to its status as a branch. The Swedish regulator
imposes a single capital requirement on Skandiabanken AB, which includes the bank's Norwegian and Swedish banking operations.
However, we understand that the Norwegian operation will be converted into a subsidiary in October, and at that point it will become
subject to Norway's regulatory capital requirements. We also understand that the bank's ultimate insurance parent is eying a 13%
common equity tier 1 (CET1) ratio for the bank at the time of the conversion. It intends to complement capitalisation, at the time of
the conversion to a subsidiary, by the issuance of tier 1 and tier 2 notes, resulting in a total capital ratio in excess of 16%.
4
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
We expect Skandiabanken Norge will have a more stable and predictable capital structure than its Swedish banking parent, which
over the past three years has pursued an aggressive growth strategy, enabled by multiple capital injections from its insurance parent,
Skandia Insurance Company Limited (A2 Insurance Financial Strength). It is unlikely that the Norwegian bank will be able to rely on
ongoing capital injections in the future given its likely diverse ownership structure following the planned IPO.
Funding consists of stable retail deposits but we expect that wholesale funding will play a more
prominent role in the future
Skandiabanken Norge benefits from a stable funding structure, with retail deposits accounting for approximately 76% of total liabilities
at 30 June 2015. While we expect those retail depositors to remain loyal - Skandiabanken Norge does not compete on price when
trying to attract deposits -, the bank's online setup provides the bank as well as its customers with flexibility.
However, market funding is cost effective and that is why we expect it to feature more prominently in Skandiabanken Norge’s funding
structure over the next three years. Currently, debt as a proportion of total funding remains small compared to other Norwegian banks,
as the bank only launched its medium term note and covered bond programs as recently as 2012 and 2013, respectively. Against this
backdrop, it is likely to gradually increase reliance on market funding, thus exposing it to the risk of swings in investor sentiment.
We do not expect market funding growth to be as aggressive over the next three years as it has been during the past two, because the
bank will not receive the capital injections required to sustain such a balance sheet expansion, unlike the Swedish business which has an
insurance parent that is willing to provide the necessary backing.
Skandiabanken Norge’s liquidity position remains strong, with liquid assets of around NOK9.0 billion compared to outstanding market
funding of NOK15.7 billion a year end-2014. More than 80% of that market funding consists of covered bonds with maturities in
excess of one year, thus not increasing immediate refinancing risks.
Mortgage orientated business model lacks diversification
Skandiabanken Norge’s strength of mainly providing mortgage lending also exposes it to some weaknesses inherent in any monoline
business as the bank is entirely reliant on interest income from home loans. Unsecured lending such as credit cards and car loans
combined formed less than 6% of total lending at 30 June 2015. We understand that non-mortgage lending will remain small even
though the bank launched consumer lending earlier this year. We capture the absence of diversification by positioning Skandiabanken
Norge’s baseline credit assessment – or its intrinsic financial strength - one notch below what it would otherwise be, in line with banks
that employ a similar business model.
A large cushion of bail-in-eligible debt protects depositors against loss in a currently unlikely failure
scenario
As a member of the European Economic Area, Norway is in the process of introducing the EU’s Bank Resolution and Recovery Directive
(BRRD). Under this regime, Skandiabanken Norge’s unsecured liabilities could be subject to bail-in, assuming a currently unlikely
failure scenario. Skandiabanken Norge’s deposit ratings benefit from a one notch uplift as a result of a cushion of bail-in-eligible senior
unsecured debt, junior obligations as well as deposits, under our advanced loss-given-failure (LGF) analysis.
We have also assigned a long and short-term counterparty risk assessment (CR Assessment) of A1(cr)/P-1(cr) to the bank. CR
Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails and are distinct from debt and deposit
ratings in that they (1) consider only the risk of default rather than the likelihood of default and the expected financial loss suffered in
the event of default and (2) apply to counterparty obligations and contractual commitments rather than debt or deposit instruments.
The CR assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations
(servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities.
A low likelihood of government support given the bank’s small footprint in Norway
Skandiabanken Norge’s ratings do not benefit from government support uplift, taking into account the bank's limited national market
share of only 2.1%. Geographically the bank lends all over Norway, a feature of its online-only presence, with some concentration in
5
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
the capital Oslo and the surrounding Akershus region. This contrasts with the more regional focus of some of Norway’s savings banks.
Unlike Skandiabanken Norge, some of these are important regional players, even though they are small nationally.
Covered bond investors are affected by proposed transfer of Norwegian business held in
Skandiabanken AB Filial Norge
We expect that Skandiabanken ASA8 on 5 October will assume assets and liabilities of Skandiabanken AB Filial Norge. A covered bond
issuing entity, Skandiabanken Boligkreditt AS9 , will simultaneously be established under Norwegian covered bond regulation. This
transaction is subject to approvals by covered bondholders and regulators. For more information, please refer to Skandiabanken AB's
announcement on 19 August 2015.
We have assigned a provisional (P)Aaa rating to the covered bonds to be issued by Skandiabanken Boligkreditt AS, reflecting (1) the
expected credit strength of the issuer, (2) the support provided by the Norwegian legal framework and (3) the credit quality of the
cover pool backing the covered bonds. For more information please refer to our press release discussing the covered bonds.
Covered bonds are protected by Norway's covered bond regulation and their status in resolution
We consider that the protection provided by Norway's upcoming resolution regime implies that covered bonds are shielded from
losses until more junior ranking debt classes are exhausted by write-downs in case of severe losses, allowing the issuer to continue
to perform its duties vis a vis covered bond investors. This strengthens the credit profile of the covered bonds to be issued by
Skandiabanken Boligkreditt AS. We consider the bail-in exemption for covered bonds that is part of the European Union’s Bank
Resolution and Recovery Directive, and which we expect Norway will implement in a similar way, as credit positive.
Covered bonds are backed by a ring-fenced cover pool which consists of high quality assets
The mortgages in the pool will have a low current loan-to-value (LTV) of 54%, which provides a good cushion against property
value deterioration. Moreover, all mortgages are secured by owner-occupied properties and the mortgage loans are underwritten on
coherent principles that partially exceeded the prudent Norwegian regulatory requirements, for example by stressing the interest rates
to a minimum rate of 10% when assessing the debt affordability of the borrower. Further, the covered bond regulation provides for the
exclusion of non-performing mortgages from cover pool tests, thereby assuring that the cover pool at the time of issuer failure is still of
appropriate quality.
Covered bonds benefit from reduced asset fire-sale risk
We assess the likelihood that timely payments on the Boligkreditt covered bonds will continue even if the issuer itself ceases to make
payments as “High”, in line with the majority of Norwegian covered bond programmes and one notch better than the covered bonds
currently issued by Skandiabanken AB. This is because, in contrast to the hard-bullet covered bonds issued currently by Skandiabanken
AB, the future covered bonds of Skandiabanken Boligkreditt AS are proposed to be soft-bullets, carrying a one-year extension period on
the bonds’ maturity date. This aspect supports the likelihood of timely payments and reduces potential losses due to refinancing risk of
the bonds and resulting fire-sale risk of the assets.
6
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
Peer Group:
»
Lansforsakringar Bank AB (publ)
»
Storebrand Bank
»
SBAB Bank AB (publ)
Methodologies Used:
»
Banks
Credit Opinions:
»
Skandiabanken AB
»
Storebrand Bank
»
Lansforsakringar Bank AB (publ)
»
Norway, Government of
Moody's Related Research
Issuer Comment
»
Norwegian IPO would leave Skandiabanken exposed to inefficiencies at home (1002591)
Pre Sale Report
»
Skandiabanken Boligkreditt AS Mortgage Covered Bonds
Rating Action
»
Moody's concludes review on Lansforsakringar Bank AB (publ), Skandiabanken AB and Volvofinans Bank AB
»
Moody’s assigns (P)Aaa to Skandiabanken Boligkreditt’s covered bonds (Norway)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this
report and that more recent reports may be available. All research may not be available to all clients.
7
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
Endnotes
1 The ratings shown here are the banks’ long and short-term deposit ratings
2 Here we refer to the long-term deposit rating, the outlook on the bank and the short-term deposit rating.
3 Please see: http://news.cision.com/se/skandia/r/skandia-utvarderar-borsnotering-av-skandiabanken-i-norge,c9707330
4 Skandiabanken Boligkreditt AS is a company wholly owned by Skandiabanken ASA and established for the purpose of issuing covered bonds.
5 Here we refer to Norway based Storebrand Bank (Baa1 stable, baa3) and KLP banken AS (covered bonds rated Aaa) as well as Sweden based
Lansforsakringar Bank AB (publ) (A1 stable, baa1)
6 Please see our credit opinion dated 30 June 2015: https://www.moodys.com/research/Norway-Government-of-Credit-Opinion--COP_565700
7 Oil price forecast is available here: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1007316
8 Note that Skandiabanken Boligkreditt AS’s legal name is currently Midgard Prosjekt II AS and Skandiabanken ASA’s legal name is Midgard Prosjekt I
ASA. It is planned that the general assembly of the entities will resolve to amend the name to Skandiabanken Boligkreditt AS and Skandiabanken ASA,
respectively, becoming effective upon completion of the envisaged transaction on 5 October 2015 subject to approvals by covered bondholders and
regulators.
9 Note that Skandiabanken Boligkreditt AS’s legal name is currently Midgard Prosjekt II ASA and Skandiabanken ASA’s legal name is Midgard Prosjekt I
ASA. It is planned that the general assembly of the entities will resolve to amend the name to Skandiabanken Boligkreditt AS and Skandiabanken ASA,
respectively, becoming effective upon completion of the envisaged transaction on 5 October 2015 subject to approvals by covered bondholders and
regulators.
8
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
© 2015 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE
CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY’S
(“MOODY’S PUBLICATIONS”) MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBTLIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY
ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET
VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL
FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED
BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT
RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT
RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS
AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND
EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS FOR RETAIL INVESTORS TO
CONSIDER MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS IN MAKING ANY INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR
OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED
OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE
FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN
CONSENT.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well
as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it
uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,
MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s Publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any
indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any
such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or
damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a
particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory
losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the
avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents,
representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH
RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including
corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,
agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain
policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and
rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at
www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
For Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty
Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided
only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to
MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly
disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the
creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail clients. It would be dangerous for “retail
clients” to make any investment decision based on MOODY’S credit rating. If in doubt you should contact your financial or other professional adviser.
For Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings
Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical
Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a
NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan
Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred
stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees
ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
9
27 AUGUST 2015
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY
MOODY'S INVESTORS SERVICE
FINANCIAL INSTITUTIONS
ANALYST CONTACTS
LONDON
+44 (0)207 772 1000
Jan Skogberg
+44 (0)207 772 1319
Analyst
[email protected]
10
27 AUGUST 2015
LONDON
+44 (0)207 772 1000
Effie Tsotsani
+44 (0)207 772 1712
Analyst
[email protected]
ANALYST
Jan Skogberg
Effie Tsotsani
VICE PRESIDENT - SENIOR ANALYST
Giovanni Fontana
SKANDIABANKEN NORGE: CREDITWORTHINESS DRIVEN BY VERY STRONG ASSET QUALITY AND SOUND PROFITABILITY