(The following statement was released by the rating agency)
Apr 05 - Standard & Poor's Ratings Services expects the economic landscape in The Netherlands to remain relatively difficult in 2012, subduing business activity and keeping the pressure on domestic borrowers and, in turn, on Dutch banks.
In an industry report card titled "Dutch Banks Are Raising Their Defenses Against The Current Tide Of Economic Uncertainty," published on April 4, 2012, on RatingsDirect, Standard & Poor's states that it foresees a moderate increase in domestic loan losses and continually intense competition, which will likely restrict banks' margins, adding to the strain on their bottom lines.
Most Dutch banks' earnings had already weakened sharply in the second half of 2011, after a fairly good showing in the first half of the year. We believe their results in 2011 largely mirrored the performance of the domestic economy, which slipped into recession in the third quarter, as well as difficult conditions in Europe.
However, we note that many Dutch banks entered this latest period of sluggish economic growth on a sound footing, and we expect them to continue to prioritize balance-sheet strength over near-term profitability. Consequently, we believe Dutch banks should still be able to maintain generally stable credit profiles this year.