Landsbankinn hf.: S&P affirms Landsbankinn’s credit rating

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.

Further information can be found in S&P’s announcement, available on the Bank’s website, www.landsbankinn.com/credit-rating.