LONDON: S&P Global Ratings has today affirmed the credit rating for Landsbankinn at BBB/A-2 with continued stable outlook.
The announcement states that S&P has lowered the industry risk in its assessment based on an eased banking sector risk, resilience of profitability during global pandemic and expectations of continued strong return on equity. Furthermore, S&P assumes stable industry risk trend.
S&P assumes a rapid increase in economic risk due to rapid rise in housing prices resulting in a higher risk of negative impact. In return, S&P notes that there has been a sharp recovery in the tourism sector and that asset quality in the corporate loan book has improved. S&P now views economic risk outlook as stable as opposed to the previous negative outlook.
In the announcement, S&P expects Landsbankinn’s risk adjusted capital (RAC) to remain very strong in addition to expectations of a continued strong profitability.
Furthermore, S&P expects Landsbankinn to maintain its position as a market leader and that the bank is well prepared to withstand negative impact from a correction in the housing market, should that materialise.
According to Wikipedia Landsbankinn, originally NBI hf, is an Icelandic bank headquartered in Reykjavík. It was established in 2008 by the Icelandic government out of the domestic operations of its predecessor Landsbanki which failed during the 2008–2011 Icelandic financial crisis.