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REYKJAVIK - S&P Global Ratings has upgraded the long-term credit rating of Landsbankinn, an Icelandic financial institution, from BBB+ to A-. This marks the highest rating for Landsbankinn since S&P began rating the bank in 2014. The upgrade is attributed to Landsbankinn’s enhanced ability to absorb losses, signified by its additional loss-absorbing capacity (ALAC).
The rating agency also raised the bank’s resolution counterparty ratings (RCR) for both long and short-term from A-/A-2 to A/A-1, with a stable outlook projected. S&P acknowledged Landsbankinn’s successful accumulation of senior non-preferred debt, which demonstrated the bank’s solid market access. The rating firm anticipates that Landsbankinn will maintain an ALAC ratio above 4% and a risk-adjusted capital (RAC) ratio over 15% for the next two years, alongside a strong credit profile, robust income, and sound asset quality.
Lilja Björk Einarsdóttir, CEO of Landsbankinn, expressed satisfaction with the upgrade, noting that it reflects the bank’s stable operations and effective access to both domestic and international capital markets. Over recent years, Landsbankinn has strategically enhanced its capital structure efficiency and complied with the increased regulatory demands placed on systematically important financial institutions.
The bank has issued equity instruments that qualify as Additional Tier 1 (AT1) capital, and its latest issuance was a senior non-preferred bond in foreign currency. Einarsdóttir emphasized that Landsbankinn is well-funded and in a strong position to support its customers.
The upgrade by S&P Global Ratings is based on a press release statement and further details can be found on Landsbankinn’s website.
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