Moody's ups Sovereign Bank view to stable

Moody's Investors Service said it changed the outlook on Sovereign Bank to stable from negative, and assigned a prime-4 rating to Santander Holdings USA, Sovereign Bank's holding company. Sovereign Bank has a bank financial strength rating of C- and a long-term deposits rating of A3.

The outlook on Santander Holdings USA, which has a senior Baa1 rating, is negative. This holding company is owned by Banco Santander Central Hispano, which has a bank financial strength rating of B- and a senior rating of Aa2.

The outlook change follows improved capital ratios, signs of stabilization in asset quality and return to profitability, Moody's said.

Although the ratings incorporate the possibility of further deterioration in the bank's portfolios, the agency said it believes the bank's capital is sufficient to absorb the additional credit costs anticipated from these portfolios, which makes downward pressure less likely in the intermediate term, the agency said.

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