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Moody's upgrades Portugal-based Banco Montepio

Moody's on Oct. 9 took several ratings actions on Caixa Económica Montepio Geral caixa económica bancária SA, or Banco Montepio, including upgrading its long-term bank deposit ratings to B1 from B3 and assigned the rating a stable outlook.

The long-term bank deposit ratings were removed from Rating Under Review, where they were placed in July. Moody's also upgraded the Portuguese bank's baseline and adjusted baseline credit assessments to "b3" from "caa1," long-term counterparty risk assessment to Ba3(cr) from B1(cr) and long-term counterparty risk rating to Ba3 from B1.

The agency said the actions reflect improved domestic operating environment, along with the bank's progress in derisking its balance sheet. Moody's added that it took into consideration the new legal framework imposed in Portugal, which establishes full depositor preference over senior unsecured debt instruments in the event of a bank resolution.