Moody's Downgrades Five Dutch Banks By 1-2 Notches

Tyler Durden's picture

While we await the Moody's downgrade of the Spanish banking system, which we can only attribute to a lack of outsourced Indian talent, since three banks are now rated higher than the sovereign, Moody's decided to give a little present to our Dutch readers by downgrading 5 of their biggest banks: Rabobank Nederland, (2 notches to A2) for ING Bank N.V., (2 notches to A2) for ABN AMRO Bank N.V. (2 notches to A2), and for LeasePlan Corporation N.V. (2 notches to Baa2). The long-term debt and deposit ratings for SNS Bank N.V. were downgraded by one notch to Baa2. And yes, this means that the US banks (looking at your Margin Stanley) are likely next.

Full report:

Moody's downgrades Dutch banking groups; most outlooks now stable

Actions conclude rating reviews announced on 15 February 2012

Frankfurt am Main, June 15, 2012 -- Moody's Investors Service has today downgraded the long-term debt and deposit ratings for five Dutch banking groups.

The long-term debt and deposit ratings for four groups declined by two notches: to Aa2 for Rabobank Nederland, to A2 for ING Bank N.V., to A2 for ABN AMRO Bank N.V., and to Baa2 for LeasePlan Corporation N.V.. The long-term debt and deposit ratings for SNS Bank N.V. were downgraded by one notch to Baa2. The short-term ratings for all aforementioned groups are unchanged.

Concurrently, Moody's has assigned stable outlooks to the ratings for four of the aforementioned groups, while assigning negative outlooks to the ratings for ING Bank N.V. and its related entities.

Please click this link for the List of Affected Credit Ratings. This list is an integral part of this Press Release and identifies each affected issuer. For additional information on bank ratings, please refer to the webpage containing Moody's related announcements

Today's actions reflect Moody's view that Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond. Furthermore, the Dutch banks affected by today's actions have structural features which, while not new, heighten risks for creditors amidst elevated uncertainty and downside risks to the economic outlook and fragile investor confidence in Europe. With today's rating actions, Moody's is giving greater weight to these features in assessing the overall risk profile of these institutions, consistent with its previously-announced analytic approach (see "European Banks -- How Moody's Analytic Approach Reflects Evolving Challenges", 19 January 2012,

Specifically, the main drivers underlying today's rating actions on Dutch banks are as follows:

(i) Adverse operating conditions, including the current recession and declining house prices in the Netherlands, will likely persist at least through 2012. Moreover, the Netherlands, as a euro area member deeply integrated within the EU, is affected by the ongoing euro area debt crisis and regional economic weakness. Economic weakness limits household incomes and business earnings, which will likely adversely affect credit costs and profitability for banks.

(ii) The Dutch banks affected by today's rating actions have characteristics that render them more vulnerable in the current environment, including structural reliance on wholesale funds and large mortgage books. Wholesale funding is susceptible to changes in investor confidence, while high real estate exposures leave banks sensitive to potential deterioration in loan performance given declining real estate collateral values. Moody's recognises, however, that Dutch banks have generally retained good access to market funding, and asset quality remains sound to date.

In addition, Moody's assumptions about the availability of government support for ABN AMRO have declined slightly, reducing the support-driven uplift factored into the long-term debt and deposit ratings for the bank to three notches (previously four). Support-driven ratings uplift for ABN AMRO is now more in line with other systemically-important European banks. Support-driven ratings uplift for the other four Dutch groups downgraded today is unchanged.

More detail on bank-specific rating drivers is discussed below.

The revised rating levels also take into account several mitigating factors, including (i) the large Dutch banks' strong, sustainable domestic franchises; (ii) improved regulatory capitalisation; and (iii) relatively stable pre-provision earnings. Moody's also recognises that the domestic environment for Dutch banks has weakened less compared with more stressed euro area countries, given the strong credit profile of the Dutch government (rated Aaa, with a stable outlook).

Following today's downgrades, the average asset-weighted deposit rating for Dutch banks is between A1 and A2 (closer to A1), but still ranks in the upper range among European banking systems. The average asset-weighted standalone credit assessments is between a3 and baa1 (closer to baa1), also in the upper peer range.

Moody's has published a Special Comment today entitled "Key Drivers of Dutch Bank Rating Actions," ( which provides more detail on the rationales for these rating actions.


The stable rating outlooks for four of the five Dutch banking groups downgraded today express Moody's view that currently foreseen risks to creditors are now reflected in these ratings. Nevertheless, negative rating momentum could develop if conditions deteriorate beyond current expectations. Specifically, Moody's has factored into the ratings an increased risk of an exit of Greece from the euro area, but this is currently not the central scenario. If a Greek exit became Moody's central scenario, further rating actions on European banks could well be needed.

The negative rating outlooks for ING Bank and its related entities take into account the bank's specific funding structure, which substantially relies on wholesale funds and which has a significant proportion of non-domestic deposits. Under a stressed scenario, some of these non-domestic deposits could, in Moody's view, become less fungible as national regulators focus on safeguarding local liquidity.



The Dutch economy is currently in recession and Moody's expects Dutch real GDP to contract by 0.6% in 2012 overall (see Sovereign Country Credit Statistical Handbook, 31 May 2012, As an open economy deeply integrated within the EU, the Netherlands is affected by regional economic weakness and by the increased risk of additional shocks emanating from the ongoing euro area debt crisis.

In addition, housing prices in the Netherlands have declined since 2009 after more than a decade of steady growth (source: Dutch Central Bank). As a result, the value of real estate collateral backing domestic housing loans is declining. Amidst the current recession, bankruptcies have also risen to the highest level since 1993 (source: Central statistical office of the Netherlands), posing a risk for banks' lending to small and mid-sized enterprises.

Furthermore, Dutch households have some of the highest debt levels among western European countries, at 127% of GDP and almost 250% of gross income at year-end 2010 (source: Eurostat). Moody's recognises that Dutch household loans, including banks' large residential mortgage books, have shown resilient performance to date; however, highly indebted Dutch consumers are vulnerable to the possibility of a prolonged recession.


As stated, the Dutch banks affected by today's actions have structural features that, while not new, exacerbate risks for bank creditors in the current difficult environment. Specifically, the large mortgage books of Dutch banks have historically contributed to low and relatively stable loan losses; however, amidst the current recession and declining housing values, this large sector exposure may lead to elevated losses if the so-far modest deterioration of housing loans accelerates. Besides their large household mortgage portfolios, several Dutch banks are also active in commercial real estate (CRE) lending. Collateral values for these loans have declined in recent years together with commercial property prices (source: DNB/International Monetary Fund).

Another key vulnerability of Dutch banks is their structural reliance on wholesale and non-domestic funding sources to finance a portion of their core domestic lending. This reliance renders banks vulnerable to potentially sudden changes in market confidence amidst the adverse and highly uncertain European operating environment. Indicating a gap in retail funding, the loan-to-deposit ratio of ING Bank, Rabobank, ABN AMRO and SNS Bank ranged between 122% and 162% at year-end 2011 (source: Moody's computation based on company reports), above the levels of many international peers. In addition, under a stressed scenario, non-domestic deposits of Dutch banks could, in Moody's view, become less fungible, because national regulators increasingly focus on safeguarding local liquidity.

These concerns are partly mitigated by the success of Dutch banks in accessing capital markets on reasonable terms recently, and by their ability to maintain or increase average debt maturities and grow deposits.


Dutch banks' strong and sustainable domestic franchises are a source of steady pre-provision earnings. These earnings provide a buffer to absorb losses and underpin the continued high ratings for the leading Dutch banks relative to many of their European peers. Dutch banks also recorded solid net profits in 2010 and 2011, bolstered by low loan-loss provisions, although credit costs may increase going forward.

Another mitigating factor is the improved regulatory capitalisation of most banks, which have increased significantly in recent years. However, Moody's notes that banks face only small capital charges against their large residential mortgage books, which carry low regulatory risk weights. If the historically strong performance of these loans deteriorated significantly, banks would have only limited equity cushions and reserves to absorb any losses exceeding their earnings.


The long-term debt and deposit ratings for four of the five Dutch banking groups downgraded today continue to be positioned above their standalone credit assessments, reflecting Moody's assumption of a high likelihood of systemic support, if needed.

The debt and deposit ratings of ABN AMRO now benefit from three notches of government support-driven ratings uplift (vs. four notches previously). The revised ratings uplift is more in line with other European banks and reflects the clear intent of the Dutch government to sell its ownership stake.

The debt and deposit ratings for Rabobank, ING Bank and SNS Bank continue to benefit from two notches of support uplift. The debt and deposit ratings for LeasePlan do not incorporate any uplift, as its smaller size and international business model make it less systemically important.


In addition to the above-described rating actions, Moody's has today downgraded the subordinated debt ratings of four Dutch banking groups by up to five notches, following the removal of systemic support for these securities and the respective reductions of the banks' standalone credit assessments. The removal of support for this debt class reflects Moody's view that, in the Netherlands, systemic support for subordinated debt is no longer sufficiently predictable and reliable to warrant incorporating uplift into Moody's ratings. (For more detail, see 29 November 2011 announcement "Moody's reviews European banks' subordinated, junior and Tier 3 debt for downgrade" -

Furthermore, Moody's downgraded today the junior subordinated debt ratings of Rabobank by two notches to Baa1(hyb), reflecting the securities' junior ranking compared with subordinated debt and the lowering of the bank's standalone credit assessment.


The current rating levels and outlooks incorporate a degree of expected further deterioration. However, the ratings may decline further (i) if operating conditions worsen beyond current expectations, notably if the economic environment encountered material negative pressure, leading to asset-quality deterioration exceeding current expectations; or (ii) if Dutch banks' market funding access experiences a significant decline; or (iii) if earnings or asset quality deteriorate sharply.

Rating upgrades are unlikely in the near future for banks affected by today's actions, for the reasons cited above. A limited amount of upward rating momentum could develop for some banks if the relevant bank substantially improves its credit profile and resilience to the prevailing conditions. This may occur through increased standalone strength, e.g. bolstered capital and liquidity buffers, work-out of asset-quality challenges or improved earnings. Improved credit strength could also result from external support, such as a change in ownership or an improved likelihood of systemic support.

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BlueCollaredOne's picture

Someones gotta say it, so I guess it will be me this time.


THX 1178's picture

It's happening multiple times per day now... FUCK!!!!

DoChenRollingBearing's picture

+ 1

Each day this story gets worse.  Europe is completely screwed.  All of our friends over there in Europe, even in stable Germany, should consider taking A LOT of their money oout of the banks NOW!

And much of that money should be used to buy gold.

Not much time.  America will be next after Europe.  Prepare.

THX 1178's picture

I've been waiting for so long... but I can honestly say the amount of daily "big news" on ZH has grown dramatically over the last 2-3 weeks. My spidey sense is tingling...

Ahmeexnal's picture

And yet, 99.999% of eurosheeple are glued to their TV sets watching 22 monkeys chasing a ball.

SilverTree's picture

Is that Football or Soccer?

ITrustMyGut's picture

hmmm... religous site.. but from this d00d's "banker contact"

June 14, 2012


It is with trepidation that I write to you....The Euro has collapsed unofficially. The money is OUT of Greece, Spain, Portugal, Ireland, Italy, France, Belgium and the German Elites have begun to shore up their wealth in hard assets and precious metals. RBS has given orders to close two of their major equities sectors, thousands of jobs are going to be lost the next few days/weeks. Credit Sussie has called on top investors to head to Swiss safe harbor and hard asset diversified portfolios.

The Capital Controls are in place to keep the charade of control going for the next four to six months before the official collapse. Steve...this is it. The Euro has collapsed and no one has noticed it. Greek bank runs are close to $3.5 Billion Euros per day not the $1 Billion that is being reported. The rest of the PIIGS are in the same boat. Bank Holiday imminent in all of continental Europe in the coming days and weeks. This is again theatrics to keep the plebeians believing in some semblance of control.

Please warn your listeners to pull out of their bank accounts everything that they need. Keep only to pay the day to day expenses. If they have land to go to, please do so now. Steve I do not know how much longer I can keep writing to you. You were knocked off line during your show with the Haggmans right before your were going to divulge what I have told you with the Spanish bailout. It is getting dangerous for all of now.

Again the Euro has collapsed...I repeat the Euro has collapsed. Unofficially.

May God Help Us All....


sablya's picture

And the market rockets upward while the $VIX plunges !!!

It is like the collapse of the Twin towers in NYC - carefully placed charges to melt key support structures, bringing the whole thing down in a carefully orchestrated maneuver.  

Who wins?  Whoever has the gold.  Whoever controls the means of production, food, water, oil, transportation.


SilverTree's picture

How dare you invoke 911! Terrorist!





sablya's picture

Haha, it is not much different really.  

Silver Bug's picture

Many more downgrade will be coming before this is all over.


Buy Silver, Protect yourself.

chump666's picture

Germany is now Europe's default holding/clearing house for inflows into Europe.  Greeks from Canada to Australia/US sending cash to their families in Greece are been diverted to Deutsch bank holding accounts.

Europe will blow.  The Fed will try and juice with the ECB exasperating the panic, extreme volatility for a few days (pre and after Greek elections) day as it rallies into a range.  After the Fed 20th June meeting, which will be extended op twists and the USD mother of all swaps to the ECB.

Market will sell hard after the 20th once EZ yields blow out to hell including Germany. The financial system will start to fall apart.  As Asia begins to panic and can't bailout/buy junk debt from the west.  Good for 3mths (or less) of trading.  Then get out of dodge as the twilight zone descends.

Ahmeexnal's picture

european and american banks are robbing the desperate greek people:


This week, it emerged that leading foreign lenders, including Deutsche Bank and Merrill Lynch, had dispatched delegations to Athens to lure private Greek depositors and companies.

The staff of European and US banks were reportedly working from suites in central hotels in an attempt to convince high earners to move deposits abroad. "Foreign banks are 'fishing' for Greeks and their savings," declared a headline in the mass-selling daily Ethnos.

chump666's picture

yeah it's scam, the Greeks are getting it from every angle.  From what I have heard families trying to send money to Greece are unable to direct TT funds to Greek banks.  It's going straight into Germany.  As the Deutsch bank trim off a profit.

Germany is acting like a f*cking financial fascist state.


chump666's picture

...and of course the Fed has destroyed the savers and now with oil bid should add an extra tax to households.

And retail traders trying to spec on stocks will be killed with volatility. Sorry no momo bull run coming (yes Market Watch get off the drugs)


THX 1178's picture

3 months is a little on the high side... I'd go with less.

chump666's picture

I'm being generous.  

Gringo Viejo's picture

People take this rating shit so seriously. Think these agencies are anymore legitimite than the markets themselves. This might as well be angies list or diamond certified. FUCK YOU....PAY ME!

yabyum's picture

Show me good bank, anywhere, name names. PLEASE

BlandJoe24's picture

Tyler, been wanting to request this for a while, finally think it's time.  Given such high volatility and instability, it would be huge service to help address the question:  “Will people actually be able to get their money if they try and  cash out their investments when things get intense?”

And so, this request for a FLOW CHART showing all the steps that must occur between pressing the “sell” button on one’s online trading platform to actually having the cash in hand.... and all the things that if they don’t work result in “SOL”.    And how long different steps can take.

Ex:  Joe Trader has been trading through his e*trade account and has had enough of the crazy market and all the risk.  He wants to cash out the options contracts he has on an ETF and wants the proceeds sent via ACH (direct deposit) to his local credit union, and he plans to withdraw the cash (to do all sorts of intelligent things with).  He wants this to happen quickly and efficiently, because he fears a crash is coming.

some of the sequential steps I can think of for this to happen (this is incomplete, becuase I'm not that knowledgable about this, therefore asking for your help):

press “sell” button on browser

online broker receives order

options clearinghouse matches with any bids

back to online broker

then to online broker’s clearinghouse

then to online broker’s clearinghouse’s bank

then through ACH system (VISA?)

then to customer’s credit union


assumptions (re: agreements held and systems functioning) (or he’s SOL)

power (electricity) working

computer working (not crashed or virus infected)

internet working

online broker working

bids are present

options clearing house working

ETF administrator working

ETF funded

clearing house working

clearing house bank working

If broker firm, etc. go under, SIPC working (takes how many days?)

If bank/credit union do under, FDIC working (takes how many days?)

Capital controls?

ACH system working?

Joe’s bank open?

Joe’s bank has cash?

Capital controls/limits on cash withdrawal?

Joe makes it home without being mugged ;-)

Joe makes wise choices with his money ;-)


Time element:

one business day hold for options to clear, three bus. days hold for stock-type trades to clear

up to three  bus. days hold for funds to clear and post at your bank (with an ACH or Check, wired money is usually posted same day)

banks/cu legally have up to three business days to come up with actual cash when you request to withdraw



I would do it myself, but don’t know enough about this stuff (let alone making a flow chart) to do a complete job.


Thank you!!!!


Cognitive Dissonance's picture

I can only assume this request is sarcasm. Way too many variables involved to even start. Thus Tyler's constant refrain to get the hell out NOW. :>)

BlandJoe24's picture

Not sarcasm. Many people, including many people regularly reading ZH, still trade.  And many people are not aware of the incredibly complex web of interactions and agreements and interactions that occur in a trade or in actually getting the money they think is readily available to them.  They have no idea how complex and layered all that is, and how easily broken down, especially in a panic or crash.  In other words, they may not know how tentative their access to their own money is.

 I found it really useful to learn about the layers that are involved, and it sobered me a great deal.  And I think a flow chart, that shows so many of these going to SOL in a start visuals, would be a cold splash of reality-water in some trading-dreamers faces.

And yes, the bottom line is either get out now, or at least plan for lots of lead time and earlier in the "chaos curve"  than you might have thought for when you do exit. 

My request to Tyler is becuase he knows way more about the layers of this process than I do.  Plus knows how to make flow charts :-)

Caviar Emptor's picture

Doesn't anyone remember what happened during the flash crash? Memories are short

SilverTree's picture

Never put your money into a system before first learning how to get it out, fast. MILLIONS of people will learn this the hard way and it will be too late.

Some of the best, most profound lessons that I have learned in life came to me THE HARD WAY. Humanity is in a state if learning it the hard way. It is the only way and MUST be so. 

Cognitive Dissonance's picture

Essentially you are asking for a flow chart on the process to evacuate a plane that has just crash landed on the runway, broken in half and is now furiously burning from end to end.

The answer is simple. GET OUT NOW!

Thank you for playing. Ya'll come back soon...ya hear? :>)

Caviar Emptor's picture

Flash crash flash back: E-mini down 3% in 4 minutes. Biggest 1 day point decline intraday in DJ history. Stop losses killed investors on the way down. 20 minutes later indices were nearly back to pre-crash levels. During the crash and most of the afternoon bids and offers were frozen and could not be canceled. Exchanges crossed orders after the fact wherever they chose to, penalizing traders with winning trades. It was a window into the soul of a panic market

BlandJoe24's picture

Not only talking about that one desparate quick chaos moment (though that is crucial to consider).  Just trying to educate more people now, when things are disintigrating, but not total complete chaos, on how getting their money out is much more iffy than they might of assumed. 

Most people assume they can get out no problem by pushing a button.  I'm hoping that when they understand more fully that access to their own cash is less assured than they thought, they might choose more careful options, like getting out now, or getting out sooner than they otherwise would have. Or diversifying. 

Most people assume the FDIC will cover their bank or credit union deposits or the SPIC will cover their investments, when these insurances will be bereft and impotent in a widespread collapse.

Also, Tyler doesn't only recommend "get out now".  He's constantly pointing out trading opportunities.  So part of ZH is still about trading smart, even in this intense moment.  And part of that is being well aware of the procedural layers and time elements involved in getting money out.

Perhaps it would have been clearer if I had just titled my original post "Illustrating the many ways getting your money out can go wrong." or "Heads up!  Getting your money out may not be as simple and guaranteed as you think!" 

Do appreciate your directness.  Best to all, Peace

mayhem_korner's picture



It may be too late by the time you figure it out.  I've been gradually and quietly transferring out of holdings and into physical assets (including some fiat) for about 20 months now. 

cbxer55's picture

These sovereign and bank downgrades are todays "Green Shoots".

Markets should go off on a moonshot tomorrow at opening.

But the closing! Ahh grasshopper, that is the question.

jamezelle's picture

Just wondering what horrible news/downgrades will surface after the US Friday close.

El's picture

Who cares about Moody's? What does Egan-Jones say? :D

Benjamin Glutton's picture

Moodys wie? We willen afgebroken door Egan Jones!

q99x2's picture

Let me help.

I'll put a finger in one of their dykes.

Oh why doesn't anyone ever ask me.

SilverTree's picture

/I'd recomend that you ask nicely first./

SilverTree's picture

I've got a few yellow bars with the Credit Suisse name on them, are they still good?



Oh, wait...I have white bars too. 

Ahmeexnal's picture

since "credit" is suisse == indebted swiss?

tony bonn's picture

i would like to know what is motivating this corrupt rating agency which collaborated in the crimes of the banks in selling overrated crap to investors to downgrade the european banks....perhaps to make the american banks look good in comparison?

Ahmeexnal's picture

The Nile ain't just a river in e-Gypt.

Caviar Emptor's picture

Now why would the good ole boys over at Moody's wanna downgrade the nice kids at the Dutch Banks? They're all cut from the same cloth after all. They'll all get their place in the plutocracy if they wait their turn. So let's all please, please go back to playing golf and having dinner in trendy restaurants and clubbing and bar hopping and doing hookers and blow and the world will be a better place for it!! THAT is what the world needs now!

Atomizer's picture



Between the extortionist stating ‘Switzerland’ must join the EU membership country club, Queen Beatrix. The scrotum ball washing, dildo strapping collective crisis is an ‘emanate’ danger, IMF Lagarde. And the cat in the hat who is dressed in his dog suit, US Reserve currency counterfeiting Ctrl +P Czar who has bed sweats at night.. 

You’ll see all characters are aligning in unison. All they know is one solution…that is until their idea’s collapse in front of their weary eyeballs.  

In the meantime, think tanks, NGO’s, and central planners are all doing cart wheels chanting success by feeding the MSM new circus acts & tricks. 

M.A.R.R.S. - Pump Up The Volume


I know, ‘you’re supposed to be taking a break Mr. Atomizer.’ Well, these events only resurface once in a lifetime.. Goodnight.

americanspirit's picture

When the rating agencies start downgrading Dutch banks the shit has actually, really, for sure hit the fan.

Rogier's picture

Correct. Up next: a 2 notch downgrade of Deutsche Bank...