Landsbankinn hf.: S&P upgrades Landsbankinn’s credit rating to A-

Core Viewpoint - S&P Global Ratings has upgraded Landsbankinn's long-term credit rating from BBB+ to A-, marking the highest rating since 2014, with a stable outlook [1][2]. Credit Rating Upgrade - The upgrade is attributed to Landsbankinn's additional loss-absorbing capacity (ALAC) and sound market access demonstrated through the successful issuance of senior non-preferred debt [1][2]. - The resolution counterparty ratings (RCR) have also been raised from A-/A-2 to A/A-1 [1]. Financial Metrics and Expectations - S&P expects Landsbankinn to maintain an ALAC ratio above 4% and a risk-adjusted capital (RAC) ratio over 15% in the next two years, alongside a robust credit profile and strong income generation [2]. Management Commentary - The CEO of Landsbankinn expressed excitement over the upgrade, highlighting the bank's solid operations and access to both domestic and international capital markets [3]. Strategic Initiatives - Landsbankinn has taken strategic steps to enhance its capital structure efficiency and comply with increased regulatory demands for systematically important financial institutions, including issuing equity instruments qualifying as Additional Tier 1 (AT1) capital [4]. - The bank has successfully issued a senior non-preferred bond in foreign currency and is well-funded in both domestic and international markets [4].