The international rating agency Standard & Poor's (S&P) has upgraded Landsbankinn's long- and short-term credit ratings from BBB-/A-3 to BBB/A-2 with a positive outlook.
In a news announcement by S&P Global Ratings published today, 25 October 2016, the agency stated that Landsbankinn's rating had been upgraded in part due to material improvement in the bank's capital position, as well as the more favourable circumstances in the Icelandic economy. S&P anticipated decreasing risks related to domestic credit as Icelandic households deleverage, resulting in debt levels in line with those of other wealthy European economies over the next two years. Capital account liberalisation is progressing satisfactorily, leading to further improvement in the country's economic resilience and in the operating environment for Icelandic banks. S&P points out that Icelandic banks now have better access to foreign credit markets and material improvements have been made in financial market regulation and supervision. Proactive measures have been taken to avoid a repeat of the excessive growth of the 2000s and to manage how cross-border capital flows affect the domestic economy.
Landsbankinn's CEO Steinþór Pálsson: "The rating upgrade from Standard & Poor's is gratifying, as it confirms the positive developments in Iceland, Landsbankinn's own strong position and the results the bank's clear strategy has delivered. In recent quarters we have clearly felt the growing confidence in the bank both domestically and abroad. This was clearly manifested in the high demand among foreign investors for the bank's EUR 500 million bond, issued for a longer maturity and on better terms than had previously been offered to Icelandic banks. The rating upgrade from BBB- to BBB with a positive outlook will place the bank in a still better position to provide exemplary banking services to its ever-growing number of customers."
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