Nordic Investment Bank 'AAA/A-1+' Ratings Affirmed On Revised Criteria; Outlook Stable

  • Following a review under our revised criteria for multilateral lending institutions (MLIs), we are affirming our 'AAA+/A-1+' ratings on Nordic Investment Bank (NIB) and removing them from under criteria observation (UCO).
  • NIB's strong lending growth and mandate fulfilment in 2018, robust liquidity, and strong capital ratios support the ratings.
  • The stable outlook reflects our view that NIB will maintain its solid capital position and sound liquidity coverage over the next two years, and continue to deliver according to its mandate.
STOCKHOLM (S&P Global Ratings) March 13, 2019--S&P Global Ratings affirmed its 
'AAA'/A-1+' long- and short-term issuer credit ratings on Nordic Investment 
Bank (NIB). The outlook is stable. 

At the same time, we removed the ratings from UCO, where we placed them on 
Dec. 14, 2018, after publishing our revised criteria for MLIs. 

We affirmed our ratings because we view NIB's enterprise risk profile as very 
strong and its stand-alone financial risk profile as extremely strong. We 
consider the institution's financial risk profile to have strengthened 
following a recalibration of our approach to assessing preferred creditor 
treatment (PCT), including the bank's pristine track record of nonaccruals and 
its impact on our calculation of the risk-adjusted capital (RAC) ratio. We 
outline these factors in our revised criteria, "Multilateral Lending 
Institutions and Other Supranational Institutions Ratings Methodology", 
published Dec. 14, 2018.

The stable outlook reflects our expectation that in the next 24 months, NIB 
will continue to make relevant contributions and fulfil its public policy 
mandate through the economic cycle, while maintaining the credit quality of 
its loan book. We also expect that support from shareholders will maintain the 
adequacy of NIB's internally generated capital and back its lending mandate.

If NIB's enterprise risk or financial risk profile were to substantially 
deteriorate, we could lower the ratings. We could also lower the ratings if we 
observed a material weakening of governance at NIB, or if dividend payment 
ratios increase substantially, resulting in lower capital that no longer 
supported its lending mandate. We could also lower the rating if we believed 
that NIB would no longer fill a market gap in funding regional development, 
signaling diminishing relevance. Moreover, if the bank's liquidity decreased 
or asset quality weakened markedly, and there was a change in members' 
willingness to support the institution, we foresee pressure on the financial 
profile and therefore on our ratings on NIB.
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