DekaBank Deutsche Girozentrale

The positive outlook reflects our expectation that the German savings banks--which own 100% of DekaBank--will show better earnings, improved group cohesion, and lower tail risks from Landesbanks. The outlook also reflects our assumption that a material shift in DekaBank's strategy and integration with the German savings banks is unlikely. We could raise the ratings on DekaBank if German savings banks can translate their strong deposit franchise into higher risk-adjusted profitability, reaching levels comparable with those of large European banking groups. A positive rating action would also depend on the German savings banks maintaining their strong capital buffers and group cohesion as well as resilient asset quality. While less likely, an upgrade could also follow if we see the savings banks

...Our ratings on DekaBank benefit from its ownership by and integration with the German savings banks. Reflecting this, we apply two notches of uplift from the '###+' stand-alone credit profile (SACP), reflecting its core status for its ultimate owners, the German savings banks. In the unlikely event that DekaBank required extraordinary support, we believe that Deutscher Sparkassen- und Giroverband (DSGV; the German Savings Banks Association), which holds a 100% stake in DekaBank on behalf of the savings banks, would serve as the principal source of such support. We expect DekaBank's strategic alignment and integration with the savings banks to remain strong. DekaBank's importance to the German savings banks is underpinned by their reliance on each other in the production and distribution of retail mutual funds. We also note DekaBank's important role in holistically supporting the savings banks' securities investments and advisory production chains in the context of regulatory and customer...

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