DBRS Assigns First-Time Ratings on ING Bank of Canada – Senior at AA (low)

DBRS has today assigned first-time ratings to ING Bank of Canada, including AA (low) Issuer & Long-Term Debt ratings and an R-1 (middle) Short-Term Debt rating.

The ratings for ING Bank of Canada reflect the franchise strength and diversity of ING Groep N.V. (ING Group or the Group), the implied systemic support for the overall Group and the implied parental support for ING Bank of Canada.

ING Group and ING Bank N.V., which comprises the Group’s banking operations including ING Bank of Canada, are widely diversified across businesses and geographies. They have multiple earnings sources that should help them cope with the current challenging environment. Also factored into the ratings is DBRS’s view that ING Group is a systemically important institution in the Netherlands. The recent capital injection of EUR 10 billion from the Dutch government demonstrates the availability of systemic support to ING Group. DBRS expects that ING Group would receive additional external support, if needed, enabling it to support subsidiaries such as ING Bank of Canada in a stress scenario.

DBRS’s ratings for ING Bank of Canada are primarily driven by the financial profile and support for the overall Group and ING Bank N.V. DBRS sees a strong likelihood that ING Bank of Canada would receive timely parental support in a stress scenario. This is reflected in an SA-1 Support Assessment for ING Bank of Canada (for more detail on DBRS’s support methodology see Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments).

The SA-1 is underpinned by the integration of ING Bank of Canada into ING Bank’s operations, including its useage of the global ING Direct brand in its Canadian online-banking operations and integrated risk and liquidity management. However, due to the lack of an explicit guarantee from ING Bank N.V. for ING Bank of Canada’s senior debt, the latter’s senior debt ratings have been placed one notch below the implied ratings for ING Bank N.V. In contrast, ING Bank of Canada’s subordinated debt carries an explicit guarantee from ING Bank N.V. and, as a consequence, this debt class has not been notched down. As a result, ING Bank of Canada’s unguaranteed senior debt ratings and its guaranteed subordinated debt are rated the same, both at AA (low).

The trend on ING Bank of Canada’s ratings is Stable. This reflects DBRS’s view that ING Group has sufficient earnings capacity and capital to cope with even a prolonged period of stress. In addition, the Stable trend also reflects DBRS’s expectation that additional systemic support would be forthcoming if the Group’s internal resources proved insufficient.

DBRS intends to issue a rating report in the near future that provides more detail on the ratings assigned to ING Bank of Canada.

Notes:
All figures are in euros unless otherwise noted.

The applicable methodology is Analytical Background and Methodology for European Bank Ratings, Second Edition, which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.