Fitch sees potential for upgrades of major Nordic banks in 2016, it said yesterday (Thursday), with SEB and Swedbank leading the positive outlook, although the timing of such rating actions would depend on how successfully sustainable long term performance and conservative credit risk profiles are balanced.

Standard & Poor’s said on Tuesday that although there are concerns about the health of the Swedish housing market, its ratings of covered bonds in Sweden already reflect such risks, with the rating agency citing state support and resilience of its ratings to a sharp fall in house prices.

Svenska Handelsbanken sold its first euro senior unsecured benchmark in over two years on Monday, attracting over Eu2.4bn of orders for a Eu1.25bn seven year, but in spite of this and some other successful supply in the FIG markets, bankers said issuers could now be done for the year.

Topdanmark Forsikring sold a Dkr1.35bn (Eu181m) two-tranche unrated Tier 2 issue on Wednesday, increasing the planned size of the transaction from Dkr750m on the back of healthy demand, according to the issuer and lead manager Danske Bank.

Standard & Poor’s upgraded Swedbank to AA- on Wednesday and revised its outlook on Skandinaviska Enskilda Banken (SEB) from negative to stable, citing a belief that the Swedish government will still support systemically important banks’ senior creditors in spite of BRRD, but the rating agency also warned of heightened economic risks for Swedish banks.

Swedish banks must tighten the internal models used to calculate their risk weightings and capital requirements, the Swedish FSA said, but it and Swedish bankers warned that standardised risk weights, as are foreseen under so-called Basel IV, could increase risks in the banking sector.