10 December 2020
During the economic downturn, the authorities have injected extra liquidity and provided financial help to corporations. So far, this has supported both financial markets and bank customers.
In line with the government relief packages being phased out, the credit institutions' losses may increase and the credit quality of their lending may deteriorate. It is important that the credit institutions continuously ensure that they have made sufficient provisions to handle the deteriorated situation.
So far, the credit institutions have come through the crisis relatively unscathed. However, the situation remains highly uncertain, and the credit institutions should be cautious when planning dividend payments.
In the most adverse scenario in the stress test performed by Danmarks Nationalbank, some systemic banks fall short of their capital buffer requirements. However, due to the withholding of dividend payments and suspension of share buybacks, among other measures, most banks are better capitalised than previously, and therefore more resilient to stress.
Read more in two new analyses of financial stability in Denmark on Danmarks Nationalbank's website.
Enquiries can be directed to Press and Communications Officer Teis Hald Jensen on tel. +45 2630 9653.