(Reuters) - S&P Global Ratings said on Tuesday it revised downward its outlook on Danske Bank to negative from positive to reflect the ongoing regulatory investigations into the company’s Estonian branch.
S&P said the negative outlook reflects the uncertain outcome of the investigation, and the damage to the reputation of the Denmark-based bank.
Danske Bank’s CEO resigned last week after an inquiry revealed that 200 billion euros ($235 billion) of payments had been moved through its Estonian branch over a period of eight years, many of which the bank said were suspicious.
S&P also lowered its rating on Danske Bank’s pension unit, Danika, to A-minus from A, as S&P believes it to be a core subsidiary.
S&P said it affirmed its A/A-1 long- and short-term issuer credit ratings on Danske.
“We could lower our issuer credit ratings within the next 18-24 months if Danske Bank’s franchise suffers lasting damage or if we believe potential regulatory penalties would weaken the bank’s capital and earnings,” S&P said.
Reporting by Ishita Chigilli Palli in Bengaluru; Editing by Matthew Lewis