The A- issuer rating on Lankdreditt Bank is based on a consolidated view of the cooperative group, Landkreditt SA, a leading provider of financial services to Norway’s agricultural sector. The bank is the main operating company of the group. In recent years, management has pursued a growth strategy in the agricultural segment as well as with retail customers to achieve greater scale and to diversify the business. The aim is for a roughly equal balance between the two customer segments.

While a digital bank since its founding, ongoing investments are being made to further digitalise customer interactions and automate processes. In addition, the bank has started incorporating ESG considerations into its credit procedures and aims to support the sustainability efforts of farmers.

Reflecting its cooperative business model and low risk culture, Landkreditt generates relatively stable but somewhat lower returns than domestic peers. Earnings, nevertheless, are more than sufficient to absorb credit costs. Asset quality remains sound with nearly all lending secured by residential property or agricultural property and land.

Landkreditt maintains reassuring solvency metrics and continues to be well positioned against current and future expected capital requirements. As well, cooperative members understand the need to support the group’s solidity.

This monitoring note does not constitute a rating action, nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

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