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Moody's acts on Sparebanken Hedmark

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Moody's acts on Sparebanken Hedmark

Moody's on April 28 assigned an A2 long-termissuer rating, with a stable outlook, following regulatory approval for thelender's acquisitionof Bank 1 Oslo AkershusAS.

The bank's A2/P-1 deposit ratings, "baa1" adjustedbaseline credit assessment and A1(cr)/P-1(cr) counterparty risk assessmentswere affirmed.

The agency also put on review for upgrade SparebankenHedmark's "baa2" baseline credit assessment, reflecting its view thatthe acquisition could bring benefits including asset quality and fundingprofile improvements, a deeper geographical and earnings diversification andopportunities for further growth of the lender's customer base.

Although the deal is likely to place some downward pressureon the bank's capital and profitability metrics over the medium term, Moody'ssaid it expects the combined group to maintain "relatively strongfinancial metrics." Moody's expects the merged entity's common equity Tier1 ratio to be around 15.3%, compared to the 17.2% CET1 ratio for SparebankenHedmark alone as of December 2015.