Scope affirms and publishes Danske Bank's A+ issuer rating with Stable Outlook

      DANSK EUR 13bn ECP and CD Programme (Short-term) DANSK EUR 10bn NEU CP DANSK 4.375 06/12/28 MTN DANSK 7.000 Perp '25 FRN DANSK 4.375 Perp '26 FRN DANSK 2.500 06/21/29 '24 MTN DANSK 1.500 09/02/30 '25 MTN DANSK 1.375 02/12/30 '25 MTN DANSK 1.000 05/15/31 '26 MTN DANSK 0.750 06/09/29 '28 MTN DANSK 4.375 06/12/28 MTN DANSK 2.250 01/14/28 '27 MTN DANSK 1.621 09/11/26 '25 MTN DANSK 3.244 12/20/25 '24 MTN DANSK 1.621 09/11/26 '25 MTN DANSK 3.244 12/20/25 '24 MTN DANSK 0.500 08/27/25 '24 MTN DANSK 0.976 09/10/25 '24 MTN DANSK 0.625 05/26/25 MTN DANSK 1.549 09/10/27 '26 MTN DANSK 1.549 09/10/27 '26 MTN DANSK 0.976 09/10/25 '24 MTN DANSK 1.223 03/23/26 MTN DANSK 0.010 11/10/24 '23 MTN DANSK 1.375 02/17/27 '26 MTN DANSK 3.773 03/28/25 '24 MTN DANSK 4.298 04/01/28 '27 MTN DANSK 4.558 03/03/26 '25 MTN DANSK 4.575 03/03/26 '25 MTN DANSK 4.558 03/03/28 '27 MTN DANSK 4.250 02/20/31 '30 DANSK 4.625 04/13/27 '26 MTN DANSK 4.000 01/12/27 '26 MTN DANSK 4.125 01/10/31 '30 MTN DANSK 5.870 02/23/28 FRN DANSK 4.750 06/21/30 '29 MTN DANSK 6.466 01/09/26 '25 MTN DANSK 3.875 01/09/32 '31 MTN DANSK 4.500 11/09/28 '27 MTN DANSK 6.259 09/22/26 '25 MTN DANSK 6.500 08/23/28 '27 MTN DANSK 6.030 11/14/29 FRN DANSK 4.625 05/14/34 '29 FRN DANSK 5.467 08/23/34 '29 FRN DANSK USD 20bn MTN (Preferred SUD) DANSK EUR 35bn EMTN (Preferred SUD) DANSK EUR 35bn EMTN Programme (Non-Preferred SUD) DANSK USD 20bn MTN (Non-Preferred SUD) DANSK USD 6bn CP Program (Short-term) DANSK USD 6bn CP Program (Long-term) DANSK UK CD Program (Short-term) DANSK UK CD Program (Long-term) DANSK EUR 13bn ECP and CD Programme (Long-term)
      TUESDAY, 18/06/2024 - Scope Ratings GmbH
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      Scope affirms and publishes Danske Bank's A+ issuer rating with Stable Outlook

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

      Rating action

      Scope Ratings GmbH (Scope) has today affirmed the A+ issuer rating of Denmark-based Danske Bank A/S (Danske) with a Stable Outlook.

      Key rating drivers

      Business model assessment: Resilient (High). The assessment reflects the broad diversification of its universal business model, which includes retail and corporate banking, capital market activities, insurance and asset management. In all of these areas, the bank has a strong franchise in Denmark and to some extent in other Nordic markets and Northern Ireland.

      Combining geographic and business diversification in an integrated manner to develop intra-group synergies, with a clear strategic roadmap, contributes to position Danske at the high end of the anchor rating matrix. Danske aims to operate with a cost/income ratio at around 45% in 2026, and a 13% return on equity target (while maintaining a 16% CET1 ratio, which is high by European standards). Given the streamlining of the bank’s activities in recent years, and the constant focus on risk management to deliver on remediation actions and meet regulatory expectations, Scope believes that meeting these targets in a sustainable manner is at reach.

      Operating environment assessment: Very Supportive (Low). Scope’s views on the likely execution of the strategic plan also factor the very supportive nature of the Nordic markets where the bank operates. Danske is the leading bank in Denmark, the third bank in Finland and a challenger bank in Sweden and Norway with a meaningful market share. The four countries are relatively small but well-interconnected, wealthy and competitive economies with high per capita incomes. Scope anticipates real GDP to remain broadly stable or improving across the Nordic region over 2024-2025. Control of inflation is a key assumption for further policy rate cuts and confirmation of a moderate economic rebound in 2025. Scope views the individual Nordic banking systems as solid and resilient to shocks, imposing traditionally high capital requirements on banks. The high degree of interconnectedness among them also supports banking activities. Developments in the residential and non-residential property markets are under scrutiny. Banks largely rely on wholesale funding which exposes them to market confidence and requires them to operate with high standards. High geopolitical risks add uncertainty to business prospects.

      Scope arrives at an initial mapping of ‘a’ based on a combined assessment of the issuer’s operating environment and business model.

      Long-term sustainability assessment (ESG factor): Developing. The assessment balances i) the significant progress made with the implementation of governance-related measures ii) investments to operate with efficient digital capabilities to meet the high standards and customer preferences in the Nordic markets, iii) the bank’s initiatives to meet stakeholder demands in terms of environmental issues, s