DBRS Downgrades 413 Members of Sparkassen-Finanzgruppe’s JL Scheme With Removal of Systemic Support

DBRS Ratings Limited (DBRS) has today downgraded to A with a Stable trend the Long-Term Debt & Deposits ratings and to R-1 (low) with a Stable trend the Short-Term Debt & Deposits ratings which apply to 413 members of the joint liability scheme of Sparkassen-Finanzgruppe. A full list of the rating actions can be found at the end of this release. This action follows the conclusion of the review that was initiated on 20 May 2015 and reflect DBRS’s view that developments in European regulation and legislation mean that there is less certainty about the likelihood of timely systemic support. This lead to the downgrade of the floor rating of the Sparkassen-Finanzgruppe which included one notch of systemic support. Please see the press release published on September 29, 2015.

The floor ratings of the Sparkassen-Finanzgruppe are based on the depth and resources of the Joint Liability Scheme, the additional support for the Group’s members from their public owners (Träger). The ratings also consider the underlying earnings potential and the solid franchise of the savings banks and the overall importance of the Group to the German banking sector. Offsetting these rating strengths are the riskier funding profile and weak overall earnings of several Landesbanks that are a meaningful part of the Group, and the high level of competition in the savings banks’ core business of German retail banking.

Note:
All figures are in Euros (EUR) unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2015). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2015) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2015). These may be found on www.dbrs.com at: http://www.dbrs.com/about/methodologies

The primary sources of information used for this rating include SNL Financial, company documents the European Commission and the Bundesanstalt für Finanzdienstleistungsaufsicht. 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.

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

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: Roger Lister
Initial Rating Date: 18 January 2007
Most Recent Rating Update: 29 May 2015

DBRS Ratings Limited
1 Minster Court, 10th Floor
Mincing Lane
London
EC3R 7AA
United Kingdom
Registered in England and Wales: No. 7139960

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