Press Release
DBRS Assigns Critical Obligations Ratings to 33 European Banking Groups
Banking OrganizationsDBRS has today assigned Critical Obligations Ratings to 33 European banking groups following the publication of the new methodology on February 2, 2016. The list of long-term and short-term ratings is included at the end of the press release.
The Critical Obligations Rating (COR) addresses the risk of default of particular obligations/ exposures at certain banks that are considered critical. For DBRS, these obligations have a higher probability of being excluded from bail-in and remaining in a continuing bank than other senior unsecured obligation. As such they are less likely to absorb losses in the event of resolution of a troubled bank, as can occur under the implementation of the Bank Recovery and Resolution Directive (BRRD).
The obligations covered by the COR encompass derivatives, payment and collection services, obligations of a bank as issuer of covered bonds, and certain liquidity lines and contingent liabilities that are considered fundamental to a bank performing its critical functions under BRRD.
DBRS has assigned the ratings to large, interconnected and systemically important banks. These banks have meaningful national market shares and are complex with many product offerings which are integral to the financing of the domestic economy. The regulatory authorities are also more likely to utilise resolution tools in case of bank failure, than consider liquidation.
DBRS utilises the long and short-term debt rating scale for the Critical Obligations Ratings. The long-term rating is generally 2 notches higher than the bank’s Intrinsic Assessment, but is typically not more than 2 notches higher than the sovereign rating. At or before the point of resolution, the COR may be delinked from the Intrinsic Assessment/ senior debt rating, which is likely to move down multiple notches due to the higher risk of being bailed-in.
DBRS will continue to monitor the application of Europe’s resolution framework in practice and, if appropriate, update its methodologies to reflect any developments.
Notes:
All figures are in EUR unless otherwise noted.
The principal applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (December 2015) and the Critical Obligations Rating Criteria (February 2016). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (December 2015) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2015). These can be found can be found at: http://www.dbrs.com/about/methodologies
The sources of information used for this rating include SNL Financial, Company Documents, the European Commission and national Central Banks and Banking Regulators. 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.
Information regarding DBRS ratings, including definitions, policies and methodologies are available on www.dbrs.com.
Ratings
ABN AMRO Bank N.V.
Allied Irish Banks, p.l.c.
BNP Paribas SA
Banca Monte dei Paschi di Siena SpA
Banco Bilbao Vizcaya Argentaria, S.A.
Banco Comercial Português, S.A.
Banco Pastor, S.A.
Banco Popolare Societa Cooperativa
Banco Popular Español S.A.
Banco Santander SA
Banco de Sabadell, S.A.
Barclays Bank PLC
Belfius Bank SA/NV
Caixa Geral de Depósitos, S.A.
CaixaBank, S.A.
Cooperatieve Rabobank U.A.
DNB Bank ASA
Danske Bank A/S
Deutsche Bank AG
Governor and Company of the Bank of Ireland, The
ALL MORNINGSTAR DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING MORNINGSTAR DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.
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Contacts
Elisabeth Rudman
Managing Director - Global Financial Institution Ratings
+(44) 20 7855 6655
elisabeth.rudman@morningstar.com- Roger Lister
Managing Director, Chief Credit Officer - Global FIG and Sovereign Ratings
+1 212 806 3231
roger.lister@morningstar.com - Alan G. Reid
Group Managing Director, Global Head of Fundamental Ratings - Credit Ratings Leadership
+(1) 212 806 3232
alan.reid@morningstar.com