S&P downgrades Danske Bank

Standard & Poor's said it lowered its long-term counterparty credit ratings on Danske Bank A/S and subsidiary Sampo Bank plc to A from A+ and affirmed their A-1 short-term counterparty credit ratings.

The agency also downgraded Danica Pension, Livsforsikringsaktieselskab's long-term counterparty credit rating to A from A+ and the long-term subordinated debt rating on its €400 million perpetual callable issuance to BBB+ from A.

The outlook is negative.

S&P said the rating actions reflect a sharp deterioration in Danske Bank's asset quality during the four quarters ended Sept. 30 and the agency's expectation that the bank's asset quality will remain under significant pressure in 2010 and therefore that the bank's profitability will remain subdued as it is not likely to be supported by the high level of gains from market-related activities reported in 2009.

Positively, the agency believes that additional external support would be provided, if required, reflecting Danske Bank's high systemic importance within Denmark and the supportive attitude of the Danish authorities.

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