Ratings are assigned following 6 June 2018 update to Moody's Banks rating methodology.
London, 26 June 2018 -- Moody's Investors Service, (Moody's) has today assigned
Counterparty Risk Ratings to 38 rated banking groups in Denmark,
Finland, Norway, Sweden, Latvia and Lithuania:
Aktia Bank p.l.c., Danske Bank A/S, DNB
Bank ASA, Eksportfinans ASA, Fana Sparebank, Helgeland
Sparebank, Hoist Finance AB (publ), Jyske Bank A/S,
KLP Banken AS, Kommunalbanken AS, Lansforsakringar Bank AB
(publ), Nordea Bank AB, Nykredit Realkredit A/S, OBOS-banken
AS, OP Financial Group, Ringkjobing Landbobank A/S,
Santander Consumer Bank AS, SBAB Bank AB (publ), Sbanken ASA,
SC Citadele Banka, SEB, Siauliu Bankas, AB, SkandiaBanken
AB, Sparbanken Syd, SpareBank 1 Nord-Norge, SpareBank
1 Ostlandet, SpareBank 1 SMN, SpareBank 1 SR-Bank ASA,
Sparebanken More, Sparebanken Oest, Sparebanken Sogn og Fjordane,
Sparebanken Sor, Sparebanken Vest, Svenska Handelsbanken AB,
Swedbank AB, Swedish Export Credit Corporation, Sydbank A/S,
Volvofinans Bank AB.
Moody's Counterparty Risk Ratings (CRR) are opinions of the ability
of entities to honor the uncollateralized portion of non-debt counterparty
financial liabilities (CRR liabilities) and also reflect the expected
financial losses in the event such liabilities are not honored.
CRR liabilities typically relate to transactions with unrelated parties.
Examples of CRR liabilities include the uncollateralized portion of payables
arising from derivatives transactions and the uncollateralized portion
of liabilities under sale and repurchase agreements. CRRs are not
applicable to funding commitments or other obligations associated with
covered bonds, letters of credit, guarantees, servicer
and trustee obligations, and other similar obligations that arise
from a bank performing its essential operating functions.
A full list of the affected ratings can be found at the end of this press
release.
RATINGS RATIONALE
In assigning CRRs to the banks and financial institutions subject to this
rating action, Moody's starts with their adjusted Baseline
Credit Assessment (BCA) and uses the agency's existing advanced
Loss-Given-Failure (LGF) approach that takes into account
the level of subordination to CRR liabilities in the institutions'
balance sheet and assumes a nominal volume of such liabilities.
For most of these banks and financial institutions, Moody's
considers the likelihood of government support for CRR liabilities to
be low, resulting in no rating uplift from their respective adjusted
BCAs, considering the current European Union's bank recovery
and resolution directive (BRRD) with legal restrictions on many forms
of government support. For Danske Bank A/S, Nykredit Realkredit
A/S, Nordea Bank AB, SEB, Swedbank AB, Svenska
Handelsbanken AB, SBAB Bank AB (publ), OP Financial Group,
SpareBank 1 SR-Bank ASA, SpareBank 1 SMN, SpareBank
1 Ostlandet, SpareBank 1 Nord-Norge, Sparebanken Vest
and Sparebanken Sor, Moody's considers the likelihood of government
support for CRR liabilities to be moderate resulting in one notch of such
support in their CRR. The moderate government support assumption
reflects these institutions' systemic importance in their respective
markets. For Swedish Export Credit Corporation, Moody's
considers the likelihood of government support for CRR liabilities to
be high, but it does not result in an additional notch due to its
already high preliminary rating assessment of Aa1, close to the
sovereign rating of Sweden at Aaa. For DNB Bank ASA and Kommunalbanken
AS, Moody's considers the likelihood of government support
for CRR liabilities to be high resulting in two and one notches of additional
uplift respectively.
Although most of the 38 banking groups are likely to have more than a
nominal volume of CRR liabilities at failure, this has no impact
on the ratings at most of these banks because the significant level of
subordination below the CRR liabilities already provides the maximum amount
of uplift allowed under Moody's rating methodology.
In all cases the CRRs assigned are equal to or higher than the rated banks'
and financial institutions senior debt or issuer ratings, where
such ratings are assigned. This reflects Moody's view that secured
counterparties to banks and banking groups typically benefit from greater
protections under insolvency laws and bank resolution regimes than do
senior unsecured creditors, and that this benefit is likely to extend
to the unsecured portion of such secured transactions in most bank resolution
regimes. Moody's believes that in many cases regulators will
use their discretion to allow a bank or banking group in resolution to
continue to honor its CRR liabilities or to transfer those liabilities
to another party who will honor them, in part because of the greater
complexity of bailing in obligations that fluctuate with market prices,
and also because the regulator will typically seek to preserve much of
the bank's operations as a going concern in order to maximize the
value of the bank in resolution, stabilize the bank quickly,
and avoid contagion within the banking system. CRR liabilities
at these banking groups therefore benefit from the subordination provided
by more junior liabilities, with the extent of the uplift of the
CRR from the adjusted BCA depending on the amount of subordination.
FACTORS THAT COULD LEAD TO AN UPGRADE
The CRR may be upgraded if there is a strengthening in banks' operating
environment or financial fundamentals in a way that will lead to an upgrade
of their adjusted BCA or if Moody's revises upwards its assessment of
authorities' willingness to provide support.
The banks' CRRs could also experience upward pressure from movements in
the loss-given-failure faced by these liabilities.
Changes in the banks' liability structure which would indicate a lower
loss severity for CRR liabilities could result in higher ratings uplift,
except for those banks whose CRR's are positioned three LGF notches above
their adjusted BCA.
FACTORS THAT COULD LEAD TO A DOWNGRADE
The CRR may be downgraded if there is a weakening in banks' operating
environment or financial fundamentals in a way that will lead to a downgrade
of their adjusted BCA or if Moody's revises downwards its assessment of
authorities' willingness to provide support.
The banks' CRRs could also experience downward pressure from movements
in the loss-given-failure faced by these liabilities.
Sustained lower volumes of subordinated, senior debt instruments
or junior deposits could result in fewer notches of rating uplift under
the Advanced LGF analysis.
For subsidiaries to rated banks, if Moody's were to reconsider
its assessment of affiliate support, this could also put downward
pressure on the CRRs.
Further, under Moody's methodology, a bank's CRR will typically
not exceed the sovereign rating by more than two notches.
The following ratings were assigned:
DENMARK
-- Danske Bank A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above its adjusted BCA of a3 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Jyske Bank A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Nykredit Bank A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of Baa1, at the same level as its adjusted BCA of baa1 reflecting
minus one notch from LGF, and one positive notch from government
support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
-- Nykredit Realkredit A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of Baa1, at the same level as its adjusted BCA of baa1 reflecting
minus one notch from LGF, and one positive notch from government
support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
-- Ringkjobing Landbobank A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, three notches above its adjusted BCA of a3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sydbank A/S
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
FINLAND
-- Aktia Bank p.l.c.
Local currency and foreign currency long-term Counterparty Risk
Ratings of A2, three notches above its adjusted BCA of baa2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- OP Financial Group (OPFG) and OP Corporate Bank plc
OPFG: Local currency and foreign currency long-term Counterparty
Risk Ratings of Aa2, four notches above its BCA of a3 reflecting
LGF and one notch of government support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
OP Corporate Bank: Local currency and foreign currency long-term
Counterparty Risk Ratings of Aa2, four notches above its adjusted
BCA of a3 reflecting LGF and one notch of government support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
LATVIA
-- SC Citadele Banka
Local currency and foreign currency long-term Counterparty Risk
Ratings of Ba1, three notches above its adjusted BCA of b1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Not Prime
LITHUANIA
-- Siauliu Bankas, AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Baa2, three notches above its adjusted BCA of ba2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
NORWAY
-- DNB Bank ASA
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa1, five notches above its adjusted BCA of a3 reflecting
LGF and two notches of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Eksportfinans ASA
Local currency and foreign currency long-term Counterparty Risk
Ratings of Baa2, three notches above its adjusted BCA of ba2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
-- Fana Sparebank
Local currency and foreign currency long-term Counterparty Risk
Ratings of A2, three notches above its adjusted BCA of baa2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Helgeland Sparebank
Local currency and foreign currency long-term Counterparty Risk
Ratings of A2, three notches above its adjusted BCA of baa2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- KLP Banken AS
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, two notches above its adjusted BCA of a3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Kommunalbanken AS
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aaa, four notches above its adjusted BCA of a1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- OBOS-banken AS
Local currency and foreign currency long-term Counterparty Risk
Ratings of A3, three notches above its adjusted BCA of baa3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
-- Santander Consumer Bank AS
Local currency and foreign currency long-term Counterparty Risk
Ratings of A2, three notches above its adjusted BCA of baa2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sbanken ASA
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SpareBank 1 Nord-Norge
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SpareBank 1 Ostlandet
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SpareBank 1 SMN
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SpareBank 1 SR-Bank ASA
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparebanken More
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparebanken Oest
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparebanken Sogn og Fjordane
Local currency and foreign currency long-term Counterparty Risk
Ratings of A1, three notches above its adjusted BCA of baa1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparebanken Sor
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparebanken Vest
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
SWEDEN (including foreign branches and subsidiaries)
-- Hoist Finance AB (publ)
Local currency and foreign currency long-term Counterparty Risk
Ratings of Baa3, three notches above its adjusted BCA of ba3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-3
-- Lansforsakringar Bank AB (publ)
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, three notches above its adjusted BCA of a3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Nordea Bank AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above its adjusted BCA of a3 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
--SBAB Bank AB (publ)
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, four notches above its adjusted BCA of baa1 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SEB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above its adjusted BCA of a3 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SEB AG
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above the adjusted BCA of a3 of its
parent SEB, reflecting LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- SkandiaBanken AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa3, three notches above its adjusted BCA of a3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Sparbanken Syd
Local currency and foreign currency long-term Counterparty Risk
Ratings of A3, three notches above its adjusted BCA of baa3 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-2
-- Stadshypotek AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa1, four notches above the adjusted BCA of a2 of its
parent Svenska Handelsbanken AB, reflecting LGF and one notch of
systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Svenska Handelsbanken AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa1, four notches above its adjusted BCA of a2 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Svenska Handelsbanken, New York Branch
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa1, four notches above the adjusted BCA of a2 of its
parent Svenska Handelsbanken AB, reflecting LGF and one notch of
systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Swedbank AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above its adjusted BCA of a3 reflecting
LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Swedbank Mortgage AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa2, four notches above the adjusted BCA of a3 of its
parent Swedbank AB, reflecting LGF and one notch of systemic support
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Swedish Export Credit Corporation
Local currency and foreign currency long-term Counterparty Risk
Ratings of Aa1, three notches above its adjusted BCA of a1 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
-- Volvofinans Bank AB
Local currency and foreign currency long-term Counterparty Risk
Ratings of A2, three notches above its adjusted BCA of baa2 reflecting
LGF
Local currency and foreign currency short-term Counterparty Risk
Ratings of Prime-1
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks published in
June 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Items color coded in purple in this Press Release relate to unsolicited
ratings for a rated entity which is non-participating.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
The relevant office for each credit rating is identified in "Debt/deal
box" on the Ratings tab in the Debt/Deal List section of each issuer/entity
page of the website.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Louise Lundberg
VP-Sr Credit Officer
Financial Institutions Group
Moody's Investors Service Limited, Stockholm Branch
Krejaren 2
Ostermalmstorg 1
Stockholm 114 42
Sweden
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
