According to Moody’s the funding and margin issues has made the banks susceptible to unexpected losses from which it would be a challenge for them to rebuild capital.
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Moody’s downgraded the ratings for Sweden’s Nordea Bank and Handelsbanken by one notch to Aa3, and for specialist agricultural lender Landshypotek by two notches to Baa2.
It also downgraded Norway’s DNB ASA to A1 from Aa3, reflecting the bank’s reliance on market funding, exposure to volatile asset classes like shipping and the likelihood that earnings will come under pressure from higher liquidity requirements and weaker revenue raising opportunities.
Meanwhile, the ratings for Sweden’s SEB have been confirmed at A1 and for Swedbank at A2.
Currently, Moody’s is expected to follow up its Swedish and Norwegian rating revisions with announcements for Danish and Finnish banks.
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