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S&P revises Millennium BCP outlook, affirms other Portuguese banks

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S&P revises Millennium BCP outlook, affirms other Portuguese banks

S&P Global Ratings on Dec. 5 revised Millennium BCP's outlook to positive from stable, citing a benign macroeconomic environment.

The move came as the agency also revised to positive from stable the industry risk trend for Portuguese banks, saying it expects the eased economic conditions to make it easier for lenders to restore domestic operations to profitability and to cut high stocks of bad loans and credit impairments.

For Millennium BCP, the agency said, that implies a continued reduction of bad loans that are higher than those at peers, with the bank's ratio of nonperforming exposures to total assets expected to decline to a gross 12% by the end of 2019 from 16% as of September 2017 and 18% as of year-end 2016. The bank's BB-/B long- and-short term issuer credit ratings were affirmed.

The rating agency also affirmed the BBB-/A-3 long- and short-term issuer credit ratings of CaixaBank SA unit Banco BPI SA and BPI unit Banco Português de Investimento SA, with a stable outlook, and affirmed the BB-/B long- and short-term issuer credit ratings of Haitong Securities Co. Ltd. unit Haitong Bank SA, with a negative outlook.

In addition to improving economic conditions, S&P also said Novo Banco SA's recent takeover by U.S. private equity firm Lone Star eased the agency's concern that the liquidation of the bank might impact the general stability of the banking sector.

Novo Banco SAS&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.