Large Nordic Banks’ CRE Exposure: Strong Asset Quality But Concerns Over the Uncertain Outlook Remain

DBRS Morningstar has released a commentary discussing the six largest Nordic banks’ exposure to the commercial real estate (CRE) sector. Large Nordic Banks are, on average, more exposed to CRE compared to their European peers but the asset quality of the CRE portfolios remain strong.

Key highlights include:
• Nordic banks have a high exposure to CRE.
• Some increase in exposure but asset quality remains strong.
• CRE sector remains under significant pressure in the current uncertain macroeconomic environment.

“In DBRS Morningstar’s opinion, the CRE sector continues to remain under significant pressure in the current evolving scenario of rising interest rates and weakening economic outlook,“ said Mario De Cicco, Vice President, Global Financial Institutions at DBRS Morningstar. “At the same time, we also note that the Nordic Banks remain well protected against the deterioration in the operating environment thanks to their high capital cushions.”