Moody’s upgrades Irish banks’ ratings

Bank of Ireland, AIB, Permanent TSB and EBS have had their debt ratings upgraded by international rating agency Moody’s.

The action — which sees each of the banks’ ratings rise by two notches from Baa3 to Baa1 and their outlook ratings go from stable to positive — follows Moody’s recent upgrading of Ireland’s government bond rating to Baa1 and its move earlier this year to restore Ireland’s credit rating as investment grade.

“All other ratings of these banks, including the deposit ratings, senior and subordinated debt ratings are unaffected by this rating action since the banks’ standalone bank financial strength ratings remain unchanged,” Moody’s said yesterday. Regarding the issues that could change future ratings of the banks, Moody’s said — as in the case of Ireland on a whole — that upward/ positive pressure could come with the Government continuing to comply with its fiscal consolidation targets, leading to significant improvement of Government debt affordability; and by the three major domestic banks regaining profitability and reducing their combined non-performing loan ratios, as well as a further lowering of the Government’s contingent liabilities from the banking system.