Grading by the Danish FSA of the credit quality of lending

The categorization applies for credit institutions and investment firms when reporting the distribution of the credit quality of loans and guarantees to the Danish FSA.

       

A specification of the criteria behind the classifications can be found in Annex 7 in the guideline for financial reporting (Vejledning til regnskabsindberetning for kreditinstitutter og fondsmæglerselskaber m. fl.). The Annex/categorization should not be interpreted as a guideline for the elaboration of the institution’s credit policy but applies when reporting the classification/rating of customers to the Danish FSA.

Grades for the credit quality of lending

Grade

Description

3

Customers with undoubtedly good credit quality

2a

Customers with ordinary credit quality

2b

Customers with some signs of weaknesses in credit quality

2c

Customers with significant weaknesses in credit quality but without objective evidence of impairment

1

Customers with objective evidence of impairment