Moody’s upgrades their rating of Luminor to A3

Moody’s Ratings (Moody’s) announced the upgrade of Luminor Bank’s long-term senior unsecured rating to A3 from Baa1, and long-term deposit rating to A2 from A3. Following this, Moody’s changed its rating outlook to stable.

Explaining its decision, Moody’s noted the improved asset quality of the bank, very strong core capitalisation and successful access to wholesale markets, as the primary drivers for the upgrade. Furthermore, Moody’s expects Luminor’s problem loans will remain at low levels, capitalisation will remain strong, and profitability will remain healthy.

Palle Nordahl, Chief Financial Officer, said:
“We are pleased that Moody’s has recognised the strengths of Luminor’s pan-Baltic footprint, our improved profitability, and successful management of our balance sheet. Moody’s expectations are aligned with our strategy and priorities for the period ahead – to improve our value proposition for our customers, to streamline our IT for the benefit of our customers - and so be more efficient - and to be compliant with regulatory requirements.”

Moody’s upgraded Luminor Bank AS’ long-term deposit ratings to A2 from A3 and the long-term senior unsecured ratings to A3 from Baa1. The Baseline Credit Assessment (BCA) and adjusted BCA was upgraded to baa2 from baa3, the senior unsecured medium-term note program ratings to (P)A3 from (P)Baa1 and its short-term deposit ratings were upgraded to P-1 from P-2. At the same time, the bank’s long-term Counterparty Risk Ratings (CRR) and Counterparty Risk Assessments (CRA) were upgraded to A1 and A1(cr), from A2 and A2(cr), respectively.

Short-term CRR and CRA were affirmed at P-1 and P-1(cr) respectively. The outlook on the long-term senior unsecured and deposit ratings was changed to stable from positive.