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Moody's upgrades Bank of Ireland, Allied Irish Banks

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Moody's upgrades Bank of Ireland, Allied Irish Banks

Moody's on June 6 upgraded certain ratings of Bank of Ireland and Allied Irish Banks Plc, reflecting a range of positive factors, including a further reduction in both lenders' nonperforming loans, an improvement in their capital ratios and their achieving stable core profitability.

AIB's long-term foreign- and local-currency bank deposit ratings were upgraded to Baa1 from Baa2 and the outlook revised to stable from positive. The agency also upgraded the bank's long-term counterparty risk assessment to A3(cr) from Baa1(cr) and its baseline and adjusted baseline credit assessments to "ba1" from "ba2."

Moody's upgraded Bank of Ireland's long-term local-currency issuer rating to Baa1 from Baa2 and its long-term foreign- and local-currency bank deposits to A3 from Baa1. The outlooks on the ratings remain positive. The lender's baseline and adjusted baseline credit assessments were also upgraded, to "baa3" from "ba1."

"However, AIB's higher stock of problem loans continues to justify a difference in the baseline credit assessment of AIB relative to BOI," said Irakli Pipia, a vice president and senior credit officer at the rating agency.

In addition, Moody's affirmed both banks' P-2 short-term foreign- and local-currency bank deposit ratings, as well as Bank of Ireland's A3(cr)/P-2(cr) long- and short-term counterparty risk assessments. AIB's short-term counterparty risk assessment was affirmed at P-2(cr).

Concurrently, Moody's took action on AIB unit EBS DAC, upgrading its long-term foreign- and local-currency bank deposits to Baa1 from Baa2 and changing the outlook to stable from positive.

Its long-term counterparty risk assessment was upgraded to A3(cr) from Baa1(cr) and its baseline and adjusted baseline credit assessments to "ba1" from "ba2." EBS' short-term foreign- and local-currency bank deposits and short-term counterparty risk assessment were affirmed at P-2 and P-2(cr), respectively.