Scope affirms Skagerrak Sparebank's A- rating with stable outlook

Scope Ratings UK Ltd has affirmed Skagerrak Sparebank's A- issuer rating, along with preferred senior unsecured debt and non-preferred senior unsecured debt ratings of A- and BBB+ respectively, all with a Stable Outlook. This highlights the bank's continued solid operating performance, underpinned by its "Focused (High)" business model centered on retail customers in southeastern Norway, and its membership in the Eika Alliance, which provides scale and competitive advantages.

The bank's "Very Supportive (Low)" operating environment in Norway, characterized by high per capita income, low unemployment, and a robust regulatory framework, further supports the rating. Skagerrak Sparebank reported a return on equity of 11.4% for 1H 2025 and a cost-to-income ratio of 39.9%, demonstrating strong earnings capacity. Its capital buffers remain solid with a CET1 ratio of 22.4% and a leverage ratio of 8.6% as of Q2 2025, exceeding regulatory requirements.

The Stable Outlook indicates that risks to the current rating are balanced, with potential for upside if the bank achieves significant business and geographic diversification without compromising its risk profile. Conversely, a material deterioration in asset quality or earnings, or less conservative capital management, could lead to a downgrade.