S&P cuts European banks

Standard & Poor's said it lowered its issue ratings on non-deferrable subordinated debt issued by banks in several European countries.

The agency said these rating actions reflect its reading of the European Commission's proposal for a framework for bank recovery and resolution.

After reviewing the proposal, S&P decided to remove any uplift for potential government support from issue ratings on non-deferrable subordinated instruments issued by banks in Europe. The issue ratings now solely reflect the banks' stand-alone credit profiles.

The agency said it believes that by notching from the stand-alone credit profile, the ratings better capture the greater likelihood that government intervention will not be available to support subordinated debt issues.

The agency downgraded the banks' non-deferrable subordinate debt as follows:

Banque et Caisse d'Epargne de l'Etat to A from AA;

Nordea Bank Finland plc to A from A+;

Pohjola Bank plc to A from A+;

Sampo Bank plc to BBB- from BBB+;

Nordea Bank AB to A from A+;

SBAB Bank AB to BBB+ from A;

Skandinaviska Enskilda Banken AB (publ) to BBB+ from A;

Svenska Handelsbanken to A from A+;

Swedbank AB to BBB+ from A;

Swedish Export Credit Corp. to BBB+ from AA;

DNB Bank ASA to A- from A;

Erste Group Bank AG to BBB from A-;

HYPO NOE Gruppe Bank AG to BBB from A-;

Oberoesterreichische Landesbank AG to BBB- from A-;

Raiffeisen Bank International AG to BBB from A-;

Raiffeisen Zentralbank Oesterreich AG to BBB from A-; and

UniCredit Bank Austria AG to BBB+ from A-.

The AA+/negative ratings on Oberoesterreichische Landesbank's guaranteed subordinated obligations and the AA ratings on UniCredit Bank Austria's guaranteed subordinated obligations are not affected by this action.

The agency said it affirmed the non-deferrable subordinated debt ratings on Raiffeisenbank ZAO at BBB-, on Landshypotek AB at A- and on Danske Bank AS at BB+.

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