Months after the collapse in February of Amagerbanken, the eighth-largest bank in Denmark, repercussions continue to trouble the country’s banking system. Last month, Moody’s Investors Service concluded a review of six Danish banks initiated in the wake of the takeover of Amagerbanken by a state-sponsored administration authority, downgrading their long-term ratings by one notch and also cutting by one notch the financial strength ratings of five of the banks.
In cutting the financial strength ratings of Jyske Bank, Sydbank, Spar Nord Bank, Ringkjobing, Landbobank and BankNordik, Moody’s paid particular attention to “increased concerns on the viability of market funding in the sector following the application of Bank Package III” as well as to weakened profitability projections in the low-growth Danish economy and continued concerns about the quality of loans to agriculture, real estate and SME borrowers.
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