Bulletin: Ratings On Arion Bank Not Immediately Affected By Announcement Of Extraordinary Dividend Payment And Share Buyback

MADRID (S&P Global Ratings) Feb. 14, 2018--S&P Global Ratings said today that its ratings and outlook on Iceland-based Arion Bank (BBB+/Stable/A-2) are not immediately affected by the bank's announcement of an extraordinary dividend payment and share buyback totaling Icelandic krona 25 billion. Once the dividend payment and share buyback materialize, S&P Global Ratings' risk-adjusted capital (RAC) ratio for Arion Bank would likely decline by 2.5%-3.0%, from 21.9% as of June 2017. Although the effect is material, we had already factored this into our forecasts relating to the bank's capital optimization plans, with recalibration of equity and hybrid capital levels. Specifically, we continue to project that Arion Bank will keep its RAC ratio well above 15% in the next two years,

...MADRID (S&P Global Ratings) Feb. 14, 2018--S&P Global Ratings said today that its ratings and outlook on Iceland-based Arion Bank (###+/Stable/A-2) are not immediately affected by the bank's announcement of an extraordinary dividend payment and share buyback totaling Icelandic krona 25 billion. Once the dividend payment and share buyback materialize, S&P Global Ratings' risk-adjusted capital (RAC) ratio for Arion Bank would likely decline by 2.5%-3.0%, from 21.9% as of June 2017. Although the effect is material, we had already factored this into our forecasts relating to the bank's capital optimization plans, with recalibration of equity and hybrid capital levels. Specifically, we continue to project that Arion Bank will keep its RAC ratio well above 15% in the next two years, therefore maintaining what we consider to be a very strong level of capitalization. Only a rating committee may determine a rating action and this report does not constitute a rating action....

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