Moody's on Aug. 14 took various ratings actions on Co-operative Bank PLC, including upgrading the bank's long-term bank deposit ratings to Caa1 from Caa2 and revising the outlook to stable from positive.

The agency also upgraded the U.K.-based lender's long-term counterparty risk rating to B3 from Caa1, its long-term counterparty risk assessment to B2(cr) from B3(cr), and its baseline and adjusted baseline credit assessments to "caa1" from "caa2."

At the same time, the lender's Not Prime short-term bank deposit ratings, NP short-term counterparty risk ratings and NP(cr) short-term counterparty risk assessment were affirmed.

Moody's said the upgrade of the baseline credit assessment reflects the improvements in Co-operative Bank's asset risk and higher capitalization, which are offset by persistent losses and very high operational risk.

The stable outlook reflects the ongoing initiatives to gradually reduce the operational risk to which the bank is exposed, and its management's efforts to reduce costs and reach a sustainable level of profitability, the agency noted. The risk and uncertainties embedded in such plans are also reflected in the outlook.