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S&P acts on Nykredit, Danske Bank

S&P Global Ratings on July 8 took ratings actions on twoDanish lenders and certain of their subsidiaries.

The agency revised the outlook on and subsidiaryNykredit Bank A/S tostable from negative, while affirming the long- and short-term counterpartycredit ratings of both companies at A/A-1.

The outlook revisions reflect S&P's view that the parentwill improve its additional loss-absorption capacity and continue tosuccessfully realign its funding profile over the two-year rating horizon.

Meanwhile, S&P affirmed the long- and short-termcounterparty credit ratings of Danske Bank A/S and subsidiary at A/A-1, whileraising to A from A- the long-term counterparty credit and insurer financialstrength ratings of Danske Bank insurance unit .

The outlook for the three entities is stable.

The action reflects the agency's view that Danske Bank'scapital levels have improved materially. S&P noted that the lender'srisk-adjusted capital ratio increased to 10.1% at 2015-end from 9% at 2014-end,and it expects the ratio to remain between 10.5% and 11% in the next 12 to 18months. However, at a higher earnings and capital level, the bankno longer receives one notch of rating uplift from its additional loss-absorbingcapacity.

S&P Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.