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Moody's upgrades Permanent TSB's ratings

Moody's on Oct. 4 upgraded Permanent TSB PLC's baseline and adjusted baseline credit assessments to "b1" from "b2" and its long-term senior unsecured debt rating to Ba2 from Ba3.

The agency also upgraded the bank's long- and short-term counterparty risk assessments to Baa3(cr)/Prime-3(cr) from Ba1(cr)/Not Prime(cr), as well as its long- and short-term counterparty risk ratings to Baa3/Prime-3 from Ba1/Not Prime. Its long- and short-term bank deposit ratings were affirmed at Ba2/Not Prime.

The upgraded baseline credit assessment reflects the bank's improved asset risk profile following a reduction in its problem loans, Moody's said. It also takes into account moderate improvements in the bank's profitability, although that remains structurally weaker compared to other larger and more diversified peers, the agency noted.

The outlook on Permanent TSB's long-term senior unsecured debt and deposit ratings was maintained at positive, reflecting Moody's expectation that the bank's asset quality and profitability will further improve on the back of continued regulatory pressure to trim down nonperforming loans and the supportive operating environment in Ireland.

The agency also expects the bank to issue material bail-in-able bonds in the medium-term and that its tangible banking assets will decline as a result of its ongoing de-risking process.

In addition, Moody's upgraded the long-term issuer rating of parent company Permanent TSB Group Holdings PLC to B2 from B3, with a positive outlook.