Research Update: Denmark-Based Securities Brokerage Firm Saxo Bank A/S Assigned 'BBB' Rating; Outlook Positive

Saxo Bank A/S (Saxo) is a licensed banking group that is one of Europe's top retail securities brokers in terms of product offering, with a developing institutional franchise. Saxo has a well-established franchise in Europe, a historically cautious risk-management stance that we expect will evolve as margin lending expands after its 2019 BinckBank acquisition, and moderate scale relative to larger, more diversified global peers. In our base-case scenario, we expect Saxo will be appointed a systemically important bank by the Danish Financial Supervisory Authority (FSA) in the coming months, which could make it eligible for additional loss-absorbing capacity (ALAC) consideration/uplift. We therefore assigned our 'BBB' long-term issuer credit rating to Saxo. The positive outlook reflects that we could upgrade Saxo

...- Saxo Bank A/S (Saxo) is a licensed banking group that is one of Europe's top retail securities brokers in terms of product offering, with a developing institutional franchise. - Saxo has a well-established franchise in Europe, a historically cautious risk-management stance that we expect will evolve as margin lending expands after its 2019 BinckBank acquisition, and moderate scale relative to larger, more diversified global peers. - In our base-case scenario, we expect Saxo will be appointed a systemically important bank by the Danish Financial Supervisory Authority (FSA) in the coming months, which could make it eligible for additional loss-absorbing capacity (ALAC) consideration/uplift. - We therefore assigned our '###' long-term issuer credit rating to Saxo. - The positive outlook reflects that we could upgrade Saxo if we anticipate that the resolution strategy for the group and its expanding ALAC buffers could enhance the likelihood that senior preferred obligations continue to be...

Research Update