31. Mar 2017 Rating news  – Cross-sector

Scope upgrades ING Bank’s Issuer Credit-Strength Rating to AA-/Stable from A+/Positive

The rating action reflects ING’s successful transition to a streamlined and simplified bank business model as well as its improved financial profile.

Today Scope upgraded by one notch ING Bank’s Issuer Credit-Strength Rating (ICSR) to AA- with a Stable Outlook from A+ with a Positive Outlook. According to the agency, the rating action reflects ING’s successful transition from a complex financial group structure to a streamlined and simplified bank business model. Supporting today’s ICSR upgrade is also ING Bank’s much improved financial profile.

Upgraded also by one notch were: the ratings for senior unsecured debt issued by ING Bank and ING Group, to A+ from A; the rating of Tier 2 securities issued by ING Bank to A- from BBB+; and the rating of AT1 securities issued by ING Group to BBB from BBB-. All these ratings now have a Stable Outlook.

Scope noted that when ING Bank’s ratings were first assigned, in 2014, the successful completion of the divestment plan agreed with the European Commission during the crisis years, as well as a more established track record of operating as a standalone bank, were elements underpinning a positive rating change.

The agency added that ING Bank has weathered well the restructuring process and managed to preserve the value of its core franchise and improve key funding and capital metrics. While reducing and de-risking its balance sheet, the bank has maintained adequate recurring profitability and competitive positioning in its core geographies. Moreover, the early adoption of a digital banking model has driven the success of its franchise in Germany (where it now ranks as one of the largest private retail banks) and in other important markets.

Scope reiterated that at this time the bank’s senior unsecured debt ratings remain one notch below the ICSR. Once sufficient clarity will emerge with respect to a distinction in seniority of senior unsecured debt classes in insolvency and/or resolution, Scope said that it will upgrade by one notch the ratings of senior unsecured debt that will not be eligible for MREL and/or TLAC – in line with the ICSR.

ING Bank’s short-term rating remain S-1 with Stable Outlook.

The following ratings were upgraded with a Stable Outlook:

  • Issuer Credit-Strength Rating of ING Bank: AA- from A+
  • Senior unsecured debt ratings: A+ from A
  • Tier 2 securities ratings: A- from BBB+
  • Additional Tier 1 securities ratings: BBB from BBB-

At the same time, Scope also withdrew the A ICSR of ING Group, highlighting that with the new group structure an issuer rating on the holding company alone is no longer relevant. In that, Scope has followed its rating approach for the other European banking groups with a holding company structure.

Legal and regulatory disclosures

Information pursuant to Regulation (EC) No 1060/2009 on credit rating agencies, as amended by Regulations (EU) No. 513/2011 and (EU) No. 462/2013

This report is issued by Scope Ratings AG, Berlin, District Court for Berlin (Charlottenburg) HRB 161306 B, Executive Board: Torsten Hinrichs (CEO), Dr Stefan Bund and Dr Sven Janssen.
The Lead Analyst for ING Bank NV and ING Groep NV is Chiara Romano, Analyst.
Responsible for approving all rating actions: Sam Theodore, Managing Director.

Rating history
The rating history for each issuer and debt is available on the individual public rating cards. Please follow he links below:
ING Bank NV & ING Groep NV

The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months. A rating change is, however, not automatically ensured.
The ratings ING Bank NV and ING Groep NV were not requested by the issuers (unsolicited rating) and were prepared without participation of the issuers.

Key sources of information for the rating
Website of the rated entity/issuer | Annual reports/semi-annual reports of the rated entity/issuer | performance records | Annual financial statements | Data provided by external data providers | External market reports | Press reports | other public information

Scope Ratings considers the quality of the available information on the evaluated company to be satisfactory. Scope uses information and data that it considers to be accurate and reliable. Scope cannot, however, independently verify the reliability and accuracy of such information and data.

Examination of the rating by the rated entity prior to publication
Prior to publication, the rated entities were given the opportunity to examine the rating and the rating drivers, including the principal grounds on which the credit rating or rating outlook is based. The rated entity was subsequently provided with at least one full working day, to point out any factual errors, or to appeal the rating decision and deliver additional material information. Following that examination, the ratings were not modified.

The methodologies applicable for this rating actions “Bank Rating Methodology” (May 2016) is available on www.scoperatings.com. The historical default rates of Scope Ratings can be viewed on the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s default rating, definitions of rating notations and further information on the analysis components of a rating can be found on www.scoperatings.com.

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© 2017 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings AG, Scope Analysis, Scope Investor Services GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope cannot, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided “as is” without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or otherwise damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party, as opinions on relative credit risk and not as a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings AG at Lennéstraße 5 D-10785 Berlin.

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Scope Ratings AG    Phone: +49 30 27891-0
Chiara Romano    c.romano@scoperatings.com
Samuel Theodore    s.theodore@scoperatings.com
Oliver Müller    press@scopegroup.com