Sweden’s Nordea Bank AB and Svenska Handelsbanken AB were cut by one level to Aa3 and Norway’s DNB Bank ASA was lowered to A1, Moody’s said in separate statements. Credit grades of SEB AB and Swedbank AB were affirmed while Landshypotek AB was cut two steps to Baa2. All ratings carry stable outlooks, Moody’s said.

The actions follow the “comparatively high reliance on wholesale funding, which Moody’s regards as less reliable under a severe stress scenario,” the company said in its statement on the Swedish lenders. “Moody’s acknowledges the relatively good capital markets access for most Swedish banks despite difficult market conditions in recent years.”

Moody’s, which in February said it’s reviewing 114 European lenders for possible downgrades and cut 16 Spanish banks last week, said “modest profitability” and risks to asset quality also triggered the downgrades.

“Moody’s recognizes that the Swedish economy has so far performed well compared with other European Union economies, and Swedish banks have been able to attract market funding on economic terms from international investors,” it said. “Furthermore, Swedish banks have strengthened their capitalization since 2008.”

‘Backward Looking’

Swedbank’s Chief Financial Officer Goran Bronner said this week Moody’s is “backward looking,” and told banks in the largest Nordic economy not to pay too much attention to its views. In Denmark, banks have started firing Moody’s after winning assurances from some of the country’s biggest investors that the opinions of ratings companies hold limited value.

Shares in Nordea rose 0.9 percent to 55.10 kronor as of 10:16 a.m. in Stockholm. Handelsbanken gained 0.8 percent to 208 kronor. SEB rose 1.1 percent and Swedbank gained 0.9 percent. The 43-member Bloomberg index of European lenders gained 0.6 percent.

Nykredit A/S, Denmark’s biggest mortgage lender and Europe’s largest issuer of covered bonds backed by home loans, terminated its contract with Moody’s last month, citing its “volatile” views. Danske Bank A/S Chief Executive Officer Eivind Kolding in an interview this month criticized Moody’s view on systemic support, less than a year after the bank’s mortgage arm sacked the company.

“It is hard for” rating companies “to keep track and when you come close to them it is quite apparent they have difficulty following everything that is happening elsewhere,” Bronner said. “The key is more transparency and then the market can decide.”