Fitch Ratings on Oct. 9 downgraded the support ratings of SpareBank 1 Nord-Norge, SpareBank 1 SMN and SpareBank 1 SR-Bank ASA to 5 from 3 and revised their support rating floors to No Floor from BB+.
The downgrade reflects Fitch's view that senior creditors can no longer depend on full extraordinary support from the government in case any of these banks becomes non-viable, following the Norwegian ministry of finance's proposal in June of legislation to implement the EU Bank Recovery and Resolution Directive.
The agency affirmed the A-/F2 long- and short-term issuer default ratings of SpareBank 1 SMN, SpareBank 1 SR-Bank and Sparebank 1 Boligkreditt AS, along with the A/F1 and BBB/F3 ratings of SpareBank 1 Nord-Norge and Sandnes Sparebank, respectively. The outlook on the long-term ratings is stable.
The viability ratings of SpareBank 1 SMN and SpareBank 1 SR-Bank were affirmed at "a-," that of SpareBank 1 Nord-Norge at "a" and of Sandnes Sparebank at "bbb." The agency also affirmed the long- and short-term senior unsecured debt of SpareBank 1 Nord-Norge at A/F1 and that of SpareBank 1 SMN and SpareBank 1 SR-Bank at A-/F2.
Also affirmed were SpareBank 1 Boligkreditt's support rating of 1 and Sandnes Sparebank's 5 support rating and No Floor support rating floor.