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S&P removes Swedbank, unit from CreditWatch negative

S&P Global Ratings on Sept. 27 affirmed the AA-/A-1+ long- and short-term ratings of Swedbank AB (publ) and core unit Swedbank Mortgage AB and removed the ratings from CreditWatch with negative implications.

The outlook on the ratings is negative. The agency placed the ratings on CreditWatch in April amid the money laundering scandal Swedbank was facing, which Ratings said at the time undermined the lender's reputation and might negatively affect its creditworthiness.

While Swedbank has recently replaced part of its top management and board of directors and stabilized its franchise and restored market confidence, the agency said ongoing investigations could still reveal serious deficiencies in the lender's control and governance, leading to heavy fines and reputational damage.

S&P Global Ratings said the negative outlook reflects a possible downgrade over the next six to 12 months if the ongoing probes into Swedbank identify serious control and governance weaknesses the agency considers as not aligned to its rating level, or which it sees the lender is unlikely to fix in the near term. The ratings could also be lowered if the bank faces material regulatory fines and penalties that would weaken its financial profile, the agency added.

Alternatively, Ratings said it could revise the outlook to stable if it considers the impact of the investigations on Swedbank's creditworthiness to be manageable.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.