Research Update: NIBC Bank Outlook Revised To Positive On Likely Loss-Absorption Buffer Pending Regulatory Clarity; 'BBB/A-2' Affirmed

Netherlands-based NIBC Bank intends to comply with the European Single Resolution Board's preferred resolution strategy by building a loss-absorption buffer to meet its expected minimum requirement for own funds and eligible liabilities (MREL). Although it's not yet clear how NIBC Bank will accumulate this buffer on top of its current funding and capital plans, the additional loss-absorption capacity (ALAC) would strengthen its credit profile. We are revising our outlook on NIBC to positive from stable and affirming our 'BBB/A-2' ratings. The positive outlook reflects our expectation that NIBC's loss-absorbing buffer could quite quickly represent at least 5% of our risk-weighted assets metric, allowing for a one-notch ALAC uplift leading to an upgrade, assuming its risk profile compares well with 'BBB+'

...+ Netherlands-based NIBC Bank intends to comply with the European Single Resolution Board's preferred resolution strategy by building a loss-absorption buffer to meet its expected minimum requirement for own funds and eligible liabilities (MREL). + Although it's not yet clear how NIBC Bank will accumulate this buffer on top of its current funding and capital plans, the additional loss-absorption capacity (ALAC) would strengthen its credit profile. + We are revising our outlook on NIBC to positive from stable and affirming our '###/A-2' ratings. + The positive outlook reflects our expectation that NIBC's loss-absorbing buffer could quite quickly represent at least 5% of our risk-weighted assets metric, allowing for a one-notch ALAC uplift leading to an upgrade, assuming its risk profile compares well with '###+' rated peers'....

Research Update