Moody's lowers credit rating of six Danish banks


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Thursday, 19 May 2011
Credit rating company Moody's downgrades ratings of six Danish banks. The banks concerned are Danske Bank, Jyske Bank, Sydbank, SparNord Bank, Ringk´┐Żbing Landbobank and Banknordik.
According to a press release, it also shows that the credit rating for Nordea Bank Danmark is lowered. For the banking group Nordea, Moody’s rating was Aa2 with a stable outlook.


For Danske Bank and Jyske Bank, the rating for long-term loans is lowered to A2 from A1 earlier.
Moody's started rating of Danish banks in February 2011 in connection with banking package 3 and Amagerbanken crashes when it became clear that the Danish government was prepared to let investors pay their share of the banking crisis.

The reasons for the lower credit ratings is increasing concern for the capital of banks in the wake of the banking package III, weakened profitability prospects in an economy with low growth and increasing concerns about asset quality.

On the whole the downgrade of the Danish banks makes it more expensive for banks to borrow on international capital markets, which may ultimately be reflected in the price customers pay for their bank loans.
By Team

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