Despite the European governments' and the European Central Bank's measures to contain the COVID-19 pandemic, global and European economies face an unprecedented challenge and there are substantial downside risks. We think Belfius Bank's additional loss-absorbing capacity (ALAC) could protect senior bondholders and partly offset the consequences of a harsher-than-expected economic downturn on the bank's financial profile. A downgrade of the subordinated instruments will become increasingly likely as the pandemic persists. We would downgrade them if we were to revise downward the 'a-' group stand-alone credit profile (group SACP), which is currently under pressure. We are affirming our 'A-/A-2' long- and short-term issuer credit ratings on Belfius Bank. The stable outlook reflects that potential ALAC buffers would partly offset asset quality
