DBRS Designates Rabobank Nederland as a Critically Important Banking Organisation in the Netherlands, Ratings Unaffected

DBRS has today designated Rabobank Nederland (Rabobank or the Company) as a Critically Important Banking organisation (CIB) in the Netherlands. Today’s action has no effect on the current ratings of the Company or related entities including Rabobank’s Senior Debt & Deposits rating of AAA. The trend on all ratings remains Stable.

This designation follows DBRS’s introduction of a floor rating in the Netherlands. As a CIB, Rabobank’s ratings are now subject to the floor rating. For CIBs operating in the Netherlands, 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 Dutch state 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 stable 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 the Dutch state will sustain their CIBs to ensure that their 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 Dutch state clearly demonstrate the intent to support their CIBs at this level.

The floor rating concept is a refinement of DBRS’s approach to intrinsic and support assessments, which ascribes implicit systemic support for certain banks in the Netherlands, including Rabobank, as reflected in its SA2 support assessment. For institutions with a designated SA2 support assessment DBRS expects some form of external support, if needed, ideally with a timeliness element in it.

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

Notes:
The applicable methodologies are Analytical Background and Methodology for European Bank Ratings, Second Edition, Analytical Background and Methodology for European Co-Operative Banks 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.