...Strong Standalone Strength: Danske Bank AS's ratings are underpinned by its strong Danish and Nordic franchise, which provides it with fairly diversified earnings, both geographically across the Nordics and by product range. They also factor in Fitch Rating's view that Danske's winding-down of non-core assets (mainly in Ireland) is progressing well, and that its improving profitability will enable it to continue to generate capital. Although the bank is addressing its impaired assets, these remain high compared with similarly rated peers. Non-Core Profit Pressure Subsiding: Persistent loan impairment charges (LICs), stemming from Danske's non-core Irish operations combined with the Danish recession, have significantly dented Danske's profitability since 2008, taking up between a third and three-quarters of pre- impairment operating profits. Fitch expects the improvement in the bank's profitability in 9M14 to be maintained in 2015, aided by lower LICs. Stabilising Asset Quality: Danske's...
