Moody's upgrades outlook for Bank of Ireland and AIB
International ratings giant Moody’s has upgraded its outlook on Bank of Ireland and AIB in another sign of the Irish banking sector’s slow return to stability.
AIB has been upgraded to Ba1 from Ba2 while Bank of Ireland has been moved to Baa2 from Baa3, which Moody’s says reflects the more stable outlook of the banks.
Moody’s said in a statement that its outlook on AIB “reflects Moody's expectation that the favourable operating environment will allow AIB to continue strengthening its credit fundamentals, but also that a material reduction in the stock of problem loans will remain the key challenge during in the outlook period.”
It added that its upgrade for Bank of Ireland was due to “improvements in capital and profitability, also stemming from the favourable operating environments in the UK and Ireland. Moody's also expects a reduction in the stock of problem loans from still high levels.”
The ratings agency also said that it was upgrading its Macro Profile outlook on Irish banks from a “moderate” rating to a "Moderate+" rating.