(The following statement was released by the rating agency)
Nov 20 -
-- In our view, economic risks for Norwegian banks are increasing. In particular, we believe
weakening economic conditions across Europe could have an important impact on Norway.
-- We are revising our outlook on Norway-based Gjensidige Bank ASA to negative
from stable and affirming the 'BBB+/A-2' ratings.
-- We are affirming the ratings on DNB Bank ASA and Storebrand Bank ASA. The
outlooks remain stable owing to our view of the likelihood of government and group support for
-- We are also affirming our 'BB+/B' ratings on Eksportfinans ASA. The outlook
Standard & Poor's Ratings Services said today it had revised its outlooks on Norway-based
Gjensidige Bank ASA and its subsidiary Gjensidige Bank Boligkreditt AS to negative
from stable. The 'BBB+' long-term and 'A-2' short-term counterparty credit ratings were
At the same time, we have affirmed the ratings on the following banks:
-- DNB Bank ASA at 'A+/A-1',
-- Storebrand Bank ASA at 'BBB+/A-2', and
-- Eksportfinans ASA at 'BB+/B'.
The outlooks on DNB Bank and Storebrand Bank remain stable and that on Eksportfinans ASA
We remain convinced of the financial strength of the Norwegian government and its capacity
to support the labor market. Nevertheless, we believe economic risks in the Kingdom of Norway
(AAA/Stable/A-1+) would increase if the recession in the eurozone (European Economic and
Monetary Union) impacts important Norwegian trading partners for a prolonged period. The
resulting reduction of external demand would hurt the country's export sector, and lower
consumer confidence could lead to a drop in asset values, which have been inflated by increasing
household debt. In our view, these trends point to the heightening of economic risks for
Our assessment of industry risk in Norway remains unchanged, and we view the trend for this
risk as stable.
Our affirmations of the ratings on all five banks reflect our view that the economic risks
in the Norwegian banking system remain low.
We revised our outlooks on Gjensidige Bank and its subsidiary Gjensidige Bank Boligkreditt
to negative because we consider further support for these banks from the group to be uncertain.
We believe that the bank is not yet a strategic part of the Gjensidige insurance group and, as
such, we do not add an uplift to the bank's stand-alone credit profile (SACP) for group support.
In our view, the bank has a relatively short history as a profitable institution and relies on
nongroup consumer finance customers for the majority of its profit.
The stable outlook on DNB Bank reflects that, if the SACP were to deteriorate, we could
include an additional notch of uplift in the rating. This is because we anticipate a high
likelihood of extraordinary government support for the bank in a stress scenario in line with
our view of the bank's high systemic importance in Norway. Nevertheless, if we revised our
assessment of DNB Bank's SACP downward, this would directly affect the ratings on the bank's
subordinated debt and hybrid capital issues.
The stable outlook on Storebrand Bank reflects its strategically important role within
insurance group Storebrand ASA (BBB/Stable/--) and the stable outlook on the group's
core operating company, Storebrand Livsforsikring AS (A-/Stable/--), which affords
the rating up to three notches of uplift over the SACP for the likelihood of group support. We
currently incorporate only one notch of uplift in the ratings.
We revised the outlook on Eksportfinans in February 2012.
RELATED CRITERIA AND RESEARCH
-- Subordinated Debt Of Several European Banks Downgraded On EC Draft Resolution Framework;
Other Debt Ratings Unaffected, July 24, 2012
6782163&rev_id=3&sid=912313&sind=A&", Nov. 9, 2011
6921376&rev_id=6&sid=912313&sind=A&", Nov. 9, 2011
6919278&rev_id=4&sid=912313&sind=A&", Nov. 1, 2011
6909411&rev_id=3&sid=912313&sind=A&", Nov. 9, 2011
-- Rising Household Debt Could Become A Headache For The Nordic Countries, May 30, 2011
6338060&rev_id=10&sid=912313&sind=A&", Dec. 9, 2010
6338060&rev_id=10&sid=912313&sind=A&", Dec. 6, 2010
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009
-- Group Methodology, April 22, 2009
BICRA SCORE SNAPSHOT*
BICRA Group 2 2
Economic risk 2 2
Economic resilience Very low risk Very low risk
Economic imbalances Intermediate risk Low risk
Credit risk in the economy Low risk Low risk
Industry risk 3 3
Institutional framework Intermediate risk Low risk
Competitive dynamics Low risk Low risk
Systemwide funding Intermediate risk Intermediate risk
*Banking Industry Risk Assessment (BICRA) scores are on a scale from 1 (lowest risk) to 10
(highest risk). For more details on our BICRA scores on banking industries across the globe,
please see "Banking Industry Country Risk Assessment Update," published monthly on
Ratings Affirmed; Outlook Action
Gjensidige Bank ASA
Gjensidige Bank Boligkreditt AS
Counterparty Credit Ratings BBB+/Negative/A-2 BBB+/Stable/A-2
DNB Bank ASA
Counterparty Credit Rating A+/Stable/A-1 A+/Stable/A-1
Storebrand Bank ASA
Counterparty Credit Rating BBB+/Stable/A-2 BBB+/Stable/A-2
Counterparty Credit Rating BB+/Negative/B BB+/Negative/B
NB: This list does not include all the ratings affected.