Changes to capital requirements announced by the Norwegian ministry of finance that are in line with the latest EU Capital Requirements Directive (CRD) are credit positive for the country’s banks, Moody’s said today (Thursday), in that they will strengthen the financial institutions’ capital buffers.
Nordea Kredit wrapped up three days of refinancing auctions of adjustable rate mortgage (ARM) bonds today (Thursday), while BRFkredit and Nykredit have one day left, with “extreme” spread stability to slight tightening and curve flattening flagged as notable aspects of the sales.
UBS and National Australia Bank this week successfully reopened the euro financial institutions and covered bond markets, respectively, but overall the euro primary market was slow off the mark after the summer recess.
Moody’s changed its outlook on the Danish banking system from negative to stable yesterday (Wednesday) because of a continuing stabilisation of the operating environment and reduced risks for Danish financial institutions, with covered bond developments seen as key.
Jyske Bank Group reported Dkr2.8bn (Eu376m) of pre-tax profit for the second half of 2014 on Tuesday, its largest profit ever, although the figures are the first since the merger with BRFkredit in April, which contributed nearly Dkr2.4bn in one-off income to the result.
Nykredit Realkredit got the new Danish auction season off to a flying start on Monday morning when its opening, Dkr7bn (Eu939m) sale of one year ARM bonds attracted some Dkr27.9bn of bids and achieved a level inside expectations, and the following auctions unfolded in the same vein.
Danske Bank sold a Skr5bn (Eu546m, Dkr4.08bn) April 2018 floating rate covered bond backed by Swedish and Norwegian residential and commercial mortgages yesterday (Wednesday), which was the Danish bank’s first covered bond issue in Swedish kronor in more than two years.
The covered bond market shrank last year for the first time since the European Covered Bond Council began collating statistics, according to figures released by the industry body last week, although ECBC representatives said this could be interpreted positively, while some Nordic markets are rising in prominence.
Nykredit Realkredit will kick off Danish mortgage credit institutions’ October refinancing auctions on Monday, for which BRFkredit and DLR Kredit today (Thursday) announced expected supply figures, with analysts noting a shift away from one year ARM bonds.