S&P positive on credit rating KAS BANK

Today Standard & Poors (S&P) affirmed the 'BBB+/A-2' counterparty credit ratings on the bank. The outlook remains ‘stable’.

The ratings of the European banks are currently under review by S&P. S&P observes that European authorities are taking steps to increase the resolvability of banks and require creditors rather than taxpayers to bear the burden of the costs of failure. In the near term, S&P expects that governments will remain supportive of systemically important banks' senior unsecured creditors while resolution frameworks take shape.

S&P confirms the systemic role and importance of KAS BANK in the Netherlands. As a result, and in line with the criteria, S&P adds one notch of uplift to reflect the likelihood of government support for KAS BANK if needed. S&P expects that the extra notch will not be adjusted downwards once the extraordinary government support for European banks will be ‘removed’.
S&P confirmed their trust in the strategy of the bank, as profitability will improve after it completes its restructuring plan. With EUR 336 billion of assets under administration, KAS BANK is a leading player in the Dutch securities industry.

In addition, S&P considers that the bank's business position will benefit from regulatory initiatives affecting the Dutch and European financial services industries and offers opportunities to expand its business activities in the United Kingdom and Germany. Furthermore, the bank will likely benefit from its partnership with Germany-based dwpbank which will lead to an increase in the Assets under Administration (AuA).

During 2015 S&P will review the rating of KAS BANK again and investigate whether the plan, which is under way, has been executed successfully. S&P could lower the long-term rating if, contrary to their expectation that KAS BANK's profitability fails to improve to levels more consistent with a 'BBB+'rating by 2015 once the extraordinary government support is no longer in place. A sharp increase in the profitability could potentially result in an upgrade of the rating. 

Read the S&P Research Update on KAS BANK here (PDF in new window).