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Bank Industry Risk Analysis: Danish Banks Boosted By Economic Stability, Although Earnings Potential Is Low Mar 08
Standard & Poors, March 2008
Abstract
High-income, well-diversified, and stable economy Strong asset quality and overall strong capitalization Conservative risk culture, supervision, and legislation Limited earnings prospects due to low margins and intense competition Increasing dependence on external funding Highly leveraged household sector In a global context, Standard & Poor's Ratings Services considers the Danish banking system to be of very low risk. This is reflected by our group 1 Bank Industry Country Risk Assessment (BICRA) ranking for Denmark (out of 10, 1 is the strongest). Similarly ranked banking systems include Sweden, Finland, The Netherlands, the U.K., and Ireland. The Danish banking industry consists of a highly concentrated mortgage market and a relatively fragmented banking market. The three largest players-- Danske Bank A/S (AA-/Stable/A-1+), Nykredit Realkredit...
Companies mentioned in this report are: Danske Bank A/S,Nykredit Realkredit A/S,Nordea Bank Danmark A/S
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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