Aurskog Sparebank’s A- issuer rating reflects its well-established franchise as a local savings bank operating in south-east Norway. Being a member of the Eika Alliance brings significant benefits and supports the bank’s competitive position. In addition to enabling the bank to meet the broader financial needs of clients, the alliance is a source of expertise and provides important economies of scale, particularly in banking operations and digital capabilities.

Aurskog is actively embracing developments in the area of sustainability. The bank continues to develop its capabilities to assess sustainability and climate risk considerations in its risk management and credit process. As a signatory to various global initiatives, Aurskog is also refining its sustainability objectives and reporting.

The bank’s focus on personal clients and mortgage lending contributes to earnings stability. Aurskog generates solid returns underpinned by good cost efficiency and low credit losses. Over time, the bank targets a return on equity of at least 9% and a cost income ratio of no more than 40%. Reflecting management’s risk appetite and a preference for secured lending, Aurskog’s asset quality metrics compare well to peers.

The bank maintains a sound solvency position, driven in part by relatively high regulatory requirements. Customer deposits represent the largest source of funding but similar to peers, they are insufficient to fully support lending and Aurskog must also access market funding, including covered bonds.

This monitoring note does not constitute a rating action, nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

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