Second quarter results for Danske, reported today (Thursday), reveal “good progress all over”, with a raised outlook for 2014 reflecting higher management confidence, while Swedbank results underline a Swedish trend, said a Kepler Cheuvreux analyst.
The European Securities & Markets Authority (ESMA) has proposed exempting covered bond derivatives from a central clearing obligation under EMIR if certain conditions are fulfilled, and market participants said the proposal sends a positive signal.
An Icelandic government-appointed committee has called for the establishment of specialised mortgage companies to finance mortgage lending via covered bonds, among other changes aimed at reforming the country’s housing system, according to Standard & Poor’s.
Issuer ratings look set to have been scrapped as LCR eligibility criteria for covered bonds and a transparency requirement introduced, according to a leaked EC document on the delegated act that the Commission is likely to finalise in September.
Differing capital requirements being set by Nordic financial supervisory authorities will make comparing banks’ capitalisation across the region increasingly challenging, Standards & Poor’s said yesterday (Wednesday).
Commercial mortgage backed covered bonds issued by Eiendomskreditt AS tightened some 15bp after being assigned a first, S&P rating, and the Norwegian issuer’s CFO told The Covered Bond Report that it has ambitions to grow considerably in the coming years.
SEB and Handelsbanken exceeded consensus expectations with second quarter results reported this week, while Nordea’s came in slightly below, in results that a Kepler Cheuvreux analyst said reflected the banks’ geographic business mixes.
Regulators in several countries have embarked upon attempts to calm down mortgage and housing markets. Besides limiting maximum LTVs, Sweden and Norway have been increasing risk-weight floors for mortgage assets in recent months.
The European Mortgage Federation and European Covered Bond Council are being merged, with ECBC chairman Carsten Tirsbæk Madsen saying that the move should help their lobbying efforts by highlighting the relationship between covered bonds and mortgage borrowers.
DNB’s second quarter pre-tax profits fell short of consensus expectations as the Norwegian bank announced its results today (Thursday), but it reported a CET1 level that suggests it “is becoming more like its Swedish peers and competitors”, according to a Kepler Cheuvreux analyst.