Danske drains excess liquidity, reducing LCR

Danske Bank’s liquidity coverage ratio dropped a whopping 50 percentage points in 2018 as the lender took steps to shrink its pool of easy-to-sell assets and reduce its reliance on short-term funding. 

The firm’s LCR – calculated by dividing its stock of high-quality liquid assets (HQLA) by projected net cash outflows over a 30-day stress period – was 120.6% at end-December, down from 134.6% at end-September and 170.8% a year earlier. 

Its average LCR over 2018 was 141%, down from 153% in