Brage Finans’ (Brage) A- issuer rating reflects a focused leasing and car financing business, solid credit fundamentals and strategic relationship with its owner banks. Brage acts the finance company for its owners, primarily well-established and solid savings banks operating in western and southern Norway. In addition to being an important distribution channel, the owner banks have consistently provided capital and funding to sustain growth and development.

Through the considered expansion of distribution channels as well as market share gains, Brage has steadily increased returns. For 2022, Brage reported a return on equity of 12%, excluding the commissions paid to its owners. Performance was supported by high activity levels, low credit losses and strong cost efficiency.

The nature of Brage’s business entails greater asset risk but higher margins than traditional banking focused on mortgage lending. The company has continued to grow while maintaining a sound asset quality profile, with the Stage 3 ratio at 2.2% as of year-end 2022.

As a licensed finance company regulated and supervised by the Norwegian FSA, Brage is subject to most of the same requirements as banks, including in the areas of solvency and liquidity. Brage maintains prudential metrics above relatively stringent requirements, with support from its owners as needed.

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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