Research Update: S&PCORRECT: SBAB Cut To 'A+/A-1' On Earnings Pressure And Market Share Decline; Outlook Neg

Standard & Poors, November 2008

Abstract
On Nov. 26, 2008, Standard & Poor's Ratings Services lowered its long-term counterparty credit ratings on Sweden-based Sveriges Bostadsfinansieringsaktiebolag, SBAB (publ) to 'A+' from 'AA-' and its short-term ratings to 'A-1' from 'A-1+'. The outlook is negative. The downgrade reflects increased pressure on SBAB's earnings capacity resulting from higher funding costs and a weakening of its share of and franchise in the Swedish mortgage lending market. For the nine months to Sept. 30, 2008, SBAB reported a ratio of pre-tax profit to average risk assets of 0.44%, a significant drop from 0.71% for full-year 2006 (2007 was negatively impacted by mark-to-market losses). As at Sept, 2008, SBAB's market share in the Swedish retail market had declined to 7.6% from about...

Companies mentioned in this report are: SBAB Bank AB (publ)
Action: Downgraded

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

SBAB Bank AB (publ)

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