DBRS Places Danske Bank’s A (high) Rating Under Review With Negative Implications

DBRS Ratings Limited (DBRS) has today placed the ratings of Danske Bank A/S (the Bank) including its A (high) senior unsecured debt and deposit ratings and its R-1 (middle) Short-Term rating Under Review With Negative Implications. Concurrently, the BBB (low) ratings for Danske Bank’s dated subordinated debt, as well as the BB (high) ratings on the Bank’s Hybrid Tier 1 Capital Notes, are also placed under review. These rating actions follow DBRS’s announcement that it has removed the rating floor for critically important banking organisations (CIBs) in Denmark (see “DBRS Removes Rating Floors in Four Nordic Countries”, published October 4, 2013 for further details). The review of Danske Bank’s ratings will assess the impact of the removal of the rating floor, as well as taking into account the latest developments at Danske Bank. DBRS expects to conclude its review of the ratings following publication of the legislation for systemically important financial institutions in Denmark.

DBRS removed the floor rating of A (high) for Denmark on October 4, 2013 following an assessment of the applicability of the rating floor for CIBs in four Nordic countries, including Denmark. Until the removal of the floor rating, Danske Bank’s A(high) senior unsecured debt and deposit ratings had benefited from two notches of uplift from the Intrinsic Assessment (positioned at A (low)).

Notes:
All figures are in Danish krone (DKK) unless otherwise noted.

The principal methodology applicable is: the Global Methodology for Rating Banks and Banking Organizations. Other methodologies used include the DBRS Criteria – Intrinsic and Support Assessments, Rating Bank Subordinated Debt & Hybrid Capital Instruments with Contingent Risks and Rating Bank Subordinated Debt & Hybrid Instruments with Discretionary Payments. These can be found at: http://www.dbrs.com/about/methodologies.

[Amended July 7, 2014 to reflect actual methodologies used.]

The sources of information used for this rating include company reports and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

[Amended July 7, 2014 to reflect correct disclaimers.]

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance

This rating is under review. Generally, the conditions that lead to the assignment of reviews are resolved within a 90 day period. DBRS reviews and ratings are under regular surveillance.

For further information on DBRS historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository, see:
http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: Peter Burbank
Rating Committee Chair: Alan G. Reid
Initial Rating Date: January 18, 2010
Most Recent Rating Update: July 8, 2013

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For additional information on this rating, please refer to the linking document located at: http://www.dbrs.com/research/236983/banks-and-banking-organisations-linking-document.pdf

Information regarding DBRS ratings, including definitions, policies and methodologies are available on www.dbrs.com.