DBRS Designates DnB NOR as a Critically Important Banking Organisation in Norway –Ratings Unaffected

DBRS has today designated DnB NOR Bank ASA (DnB NOR Bank) as a Critically Important Banking organisation (CIB) in Norway. Today’s action has no effect on the current ratings of DnB NOR Bank, which remain at AA for Senior Unsecured Long-Term Debt & Deposit and at R-1 (high) for Short-Term Debt & Deposit. The trend on the aforementioned ratings remains Negative.

This designation follows DBRS’s introduction of a floor rating in Norway. As a CIB, DnB NOR Bank’s ratings are now subject to the floor rating. For CIBs in Norway, DBRS has assigned a floor rating of A (high) for long-term debt and deposits and R-1 (middle) for short-term debt and deposits at the bank level. In the cases where there is a holding company, the floor has been set at “A” and R-1 (middle). The trend on the aforementioned floor ratings is Stable. The level of the floor reflects DBRS’s expectation that the Norwegian government will provide support, if necessary, to prevent any CIB from weakening below this rating level. DBRS views A (high) / R-1 (middle) as the level of creditworthiness that market participants demand for CIBs to be viewed as essential counterparties, as CIBs need to be perceived as reliable partners in undertaking a wide range of financial transactions. DBRS views the floor as the level of support at which Norway’s government will sustain its CIBs to ensure that its financial system is fully functioning.

CIBs will usually be banking organisations that have extensive involvement in a country’s financial markets and perform critical roles in the flow of financial transactions. As such, the loss of the market’s confidence in a CIB’s ability to perform as a counterparty could impact the market’s perception of other participants and lead to a degradation of the functioning of the financial markets. In the view of DBRS, the actions taken to date by the Norwegian government clearly demonstrate the intent to support its CIBs at this level.

DBRS continues to ascribe implicit systemic support for certain banks, as reflected in its SA-2 support assessment for DnB NOR Bank. For institutions with a designated SA-2 support assessment DBRS expects some form of external support, if needed, ideally with a timeliness element in it.

For more information on the floor ratings concept, please see the press release published earlier today entitled “DBRS Expands Its Floor Rating Concept to Norway,” which is available at www.dbrs.com.

The applicable methodologies are Analytical Background and Methodology for European Bank Ratings, Second Edition and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments, which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.