Moody's on Jan. 15 upgraded Banco de Reservas de la República Dominicana Banco de Servicios Múltiples' baseline credit assessment and adjusted baseline credit assessment to "b2" from "b3."

The upgrade reflects an improved operating environment for banks in the Dominican Republic, Moody's said. It also considers the bank's good asset quality and profitability, solid access to inexpensive retail deposit funding and ample liquidity buffers, all of which help offset its historically weak adjusted capitalization.

Moody's raised the Dominican Republic's Macro Profile to "Weak+" from "Weak," due to a reduction in the country's susceptibility to government liquidity and external vulnerability risks.

At the same time, the rating agency affirmed Banreservas' Ba3 long-term local currency deposit rating, B1 long-term foreign currency deposit rating, Not Prime short-term local and currency deposit ratings and B2 foreign currency subordinated debt rating. The bank's Ba3/Not Prime long- and short-term local and foreign currency counterparty risk ratings and Ba3(cr)/Not Prime(cr) long- and short-term counterparty risk assessments were also maintained. The outlook is stable.

Banreservas' local currency deposit rating is in line with the country's government bond rating, with the bank's deposits and senior obligations effectively backed by the government, Moody's said. The Dominican Republic government owns 100% of the bank, with the two maintaining close financial and business links. The rating agency also considers Banreservas' deposit and lending franchise as important given its status as the country's largest bank.