Research Update: Dutch NIBC Bank Upgraded To 'BBB+' On Increasing Loss-Absorbing Capacity; Outlook Stable

We believe that NIBC Bank N.V. (NIBC) has made good progress in growing its additional loss-absorbing capacity (ALAC), which provides a buffer for senior creditors in a resolution scenario. We also recognize the bank's continued focus on managing and reducing its higher risk exposures. This has led it to further reduce its exposure to several potentially volatile corporate sectors (shipping, commercial real estate, and offshore energy) and large equity investments. We continue to consider the bank's funding profile to be skewed toward stable funding sources, namely retail deposits and long-term wholesale instruments. We are therefore raising our long-term rating on NIBC to 'BBB+' from 'BBB', and affirming the short-term rating at 'A-2'. The unsupported group credit profile (UGCP) is unchanged

...- We believe that NIBC Bank N.V. (NIBC) has made good progress in growing its additional loss-absorbing capacity (ALAC), which provides a buffer for senior creditors in a resolution scenario. - We also recognize the bank's continued focus on managing and reducing its higher risk exposures. This has led it to further reduce its exposure to several potentially volatile corporate sectors (shipping, commercial real estate, and offshore energy) and large equity investments. We continue to consider the bank's funding profile to be skewed toward stable funding sources, namely retail deposits and long-term wholesale instruments. - We are therefore raising our long-term rating on NIBC to '###+' from '###', and affirming the short-term rating at 'A-2'. The unsupported group credit profile (UGCP) is unchanged at '###'. - The stable outlook reflects our view that the bank will be able to preserve its ALAC comfortably above our 5.5% threshold and that its appetite for portfolio concentration and high-risk...

Research Update