Moody’s acts on Irish banks

Moody's Investors Service said it upgraded the deposit ratings of three Irish banks: Allied Irish Banks, plc, Bank of Ireland and Permanent tsb plc.

The deposit ratings on KBC Bank Ireland plc, Ulster Bank Ltd. and Ulster Bank Ireland DAC were affirmed.

The actions were driven by a sharply improved operating environment, which led to an increase in the Macro Profile of Ireland (A3 positive) to “strong from “moderate+” under Moody's banking methodology, as well as favorable developments in other credit fundamentals, notably asset quality.

As part of the same action, Moody's upgraded the baseline credit assessments of Allied Irish Banks, Bank of Ireland, Permanent, Ulster Bank Ireland and Ulster Bank and affirmed the baseline credit assessment of KBC Bank Ireland.

The agency upgraded the senior unsecured ratings of Allied Irish Banks and Permanent and affirmed the senior unsecured ratings of Bank of Ireland.

Moody's maintained the positive outlook on Bank of Ireland, Allied Irish Banks and Ulster Bank’s long-term senior unsecured debt ratings and changed the outlook to positive from stable on the long-term senior ratings of Ulster Bank Ireland and Permanent.

The outlook on the deposit rating of KBC Bank Ireland remains stable.

"The main driver for the rating actions is the improvement in credit conditions in the banking system following the rapid and material deleveraging of the private sector, as well as stronger funding conditions as most banks have regained the ability to issue different debt instruments. These positive developments have been reflected in an increase in Moody's Macro Profile for Ireland," Moody’s associate managing director Laurie Mayers said in a news release.

"The rating actions also incorporate the strengthening of the banks' credit fundamentals, especially the progress they have made in reducing non-performing assets, improving the quality of earnings and strengthening their capital metrics."

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