Moody’s Confirms SBAB A2/P-1 Ratings

Moody's Investors Service has today confirmed SBAB Bank's A2 long-term issuer
and senior unsecured ratings and Prime-1 short-term rating, with a negative
outlook for long-term ratings. Following the action, Moody’s has removed SBAB
from negative review.
The confirmations reflect Moody's view that the bank's low profitability and
limited capital generating ability are in line with its limited credit risk as a
mortgage lender. The negative outlook for senior debt reflects the increased
probability that Moody's reduces the systemic support uplift for senior debt,
following the introduction of the Bank Recovery and Resolution Directive.

The negative outlook is in line with the negative outlook assigned to a wide
range of European banks’ supported long term ratings on 29 May
(https://www.moodys.com/research/Moodys-changes-outlooks-to-negative-on-82-long
-term-European--PR_300582). It reflect Moody's view that, with the legislation
underlying the new resolution framework now in place and the explicit inclusion
of burden‐sharing with unsecured creditors as a means of reducing the public
cost of bank resolutions, the balance of risk for banks' senior unsecured
creditors has shifted to the downside. While Moody's support assessments with
regards to senior unsecured debt are unchanged for now, the probability has
risen that they will be revised downwards to reflect the new framework.

At the same time, Moody's downgraded SBAB Bank's subordinated debt rating to
Baa3 from A3, and preferred stock rating to Ba2(hyb) from Ba1(hyb), with stable
outlook. Going forward, the ratings for these debt classes will be notched off
SBAB's Baa2 baseline credit assessment, and no longer incorporate systemic
support.
For further information, please contact:
Per Tunestam, Treasurer
+46 708 744 841, per.tunestam@sbab.se
SBAB’s business concept is to provide a new banking experience to consumers in
Sweden by treating every customer as unique and being the bank that is easiest
to access and understand. Today, savings and loans services are offered to
private individuals, tenant-owner associations and companies. During 2014,
everyday banking services will also be launched, including salary accounts and
bank cards. SBAB was founded in 1985 and is owned by the Swedish state. SBAB has
about 350,000 customers and some 480 employees. Read more at
www.sbab.se/english, www.twitter.com/sbabbank, www.facebook.com/sbabbank.