“Low and persistent negative interest rates and expectations of further monetary easing will adversely affect net interest income," the bank says.
Switzerland's second largest bank is following the lead of competitors in response to the country's monetary policy.
Bankers say the European Central Bank's stimulus is leading to more loans but is also cutting into profitability.
The ratings agency says the 'ultra-loose monetary policy' in Sweden 'risks leading to an (ultimately unsustainable) asset bubble.'
Markit's purchasing managers index for February increases the odds that the European Central Bank will impose more stimulus measures in March.
