S&P Global Ratings has today announced an upgrade of Landsbankinn's long-term credit rating from BBB+ to A-. This is the highest the Bank's credit rating has been since 2014, when S&P started issuing ratings for the Bank.
This upgrade to the Bank's credit rating is issued with reference to additional loss-absorbing capacity (ALAC). In addition, the resolution counterparty ratings (RCR) for the long and short-term are raised from A-/A-2 to A/A-1.
The outlook of the credit rating is stable.
In the rationale for its decision, S&P refers to Landsbankinn's ALAC buffer following the successful build-up of senior non-preferred debt where Landsbankinn demonstrated sound market access. S&P expects Landsbankinn to maintain an ALAC ratio of above 4% and a RAC ratio of over 15% over the next two years as well as maintaining a robust credit profile, strong income generation and sound asset quality.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
"We are absolutely thrilled to see an upgrade in Landsbankinn's credit rating to the A-category by S&P Global Ratings. The new rating reflects the Bank's solid operations and sound access to domestic and international capital markets.
Over the last few years, Landsbankinn has taken strategic steps to improve the efficiency of its capital structure as well as meet increased regulatory demands that apply to systematically important financial institutions. We have issued equity instruments that qualify as Additional Tier 1 (AT1) capital and our latest issuance was a senior non-preferred bond in foreign currency. The Bank is well funded on both domestic and international markets and strongly positioned to support its customers."
Further information can be found in S&P's announcement, available on the Bank's website: https://www.landsbankinn.is/en/the-bank/investor-relations/credit-rating
