Next year, Swedish banks face mixed prospects. The outlook for bank profitability and capital remains favourable, but asset quality will deteriorate and retail funding will likely contract, says Scope Ratings in a report.
Recently, lenders in the Nordic country have enjoyed gains in net interest income. The credit risk profile of Swedish banks is stable as they have comfortable capital buffers with a common equity Tier 1 ratio of 16.3%–19.4%, a balanced portfolio of mortgages and corporate loans, and a diversified and cost-efficient funding structure.
