Scope Ratings has updated its rating report on Danske Bank A/S, rated A+ with Stable Outlook.

The rating reflects the bank’s broadly diversified business model, strong franchise in very resilient Nordic economies and sound financial metrics.

In the context of Scope Ratings’ strategy of focussing on the needs of institutional investors, Scope will offer its unsolicited bank and covered bond credit ratings on a subscription basis only via its credit intelligence platform.

Rating action concludes review for possible upgrade initiated last May. Scope also upgrades senior unsecured debt to A+ from A in line with its bank rating methodology and assigns A rating to non-preferred senior debt. Negative Outlook on all ratings.

Scope Ratings has updated its rating report on Danske Bank’s AT1 securities.

The Additional Tier 1 market reaches a landmark in 2018 as the earliest issues hit their first call dates. The investor base has grown, and terms and structures have standardised. But what lessons should be learned from developments in this market?

Scope’s review will focus on execution of Danske Bank’s current measured growth strategy, its digital offering, and its risk management. The review will also assess the bank’s response to criticisms from the Danish FSA concerning its governance.

Scope’s rating action takes account of the final resolution plans announced by the Danish FSA for the country’s systemically important financial institutions (SIFIs); issuer rating unchanged at A+.

Rating upgrade reflects Scope’s view of these banks’ reassuring liquidity dynamics, positively impacted by European supervisors’ enhanced focus on bank liquidity and funding.

The handbook includes an assessment of how risks in the AT1 market are evolving. Recent developments concerning Banco Popular and Bremer Landesbank demonstrate the importance of issuer fundamentals when evaluating the likelihood of incurring losses.