Business Irish

Friday 20 September 2019

Moody's considers upgrading Ulster Bank

Photo: PA
Photo: PA

Gretchen Friemann

Ratings agency, Moody's Investors Service, is considering upgrading Ulster Banks’s credit rating after its parent RBS separated out its retail and business banking operations from its more risky investment banking division.

The move, required by new legislation, has strengthened the Irish lender’s credit profile according to Moody’s , which this morning announced it has placed Ulster’s long-term debt and deposit ratings on review for an upgrade.

The Irish bank’s potentially higher credit score had been flagged last week when the ratings agency recalibrated its ratings outlook on RBS, following the ring-fencing of its core banking divisions.

The overhaul prompted Moody’s to consider a downgrade on RBS’s overall rating but stressed the banking goliath’s retail and business operations would benefit from the change as these entities will retain mostly “retail, SME, and large corporate activities”.

However Moody’s warned that if Ulster Bank were to be excluded from  RBS Group's ring-fenced sub-group of retail and commercial banking activities, that could trigger a downgrade to the lender’s “long-term debt and deposit ratings”.

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