Fitch boosts Swedbank

Fitch Ratings said it raised Swedbank AB's long-term issuer default rating to AA- from A+ and viability rating (VR) to aa- from a+.

“The upgrade reflects our opinion that Swedbank's anti-money-laundering (AML) risk control framework has been sufficiently strengthened and is now commensurate with a VR in the aa range. Swedbank has addressed historical shortcomings identified at its Estonian subsidiary and largely concluded a broad transformation of its corporate culture, compliance and organizational structure and risk oversight. The bank continues executing its AML remediation plan, but this is no longer a rating weakness, in our view, as it reflects management's determination to achieve international best practice.

“The upgrade also considers Swedbank's robust financial profile and our expectation that the bank will maintain a sizeable capital buffer to absorb potentially large fines that could result from ongoing AML investigations,” the agency said in a press release.

The outlook is stable.

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