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Moody's upgrades Bankoa

Moody's on May 6 upgraded Bankoa SA's deposit ratings to Baa2/Prime-2 fromBaa3/Prime-3.

At the same time, the agency upgraded the bank's baselinecredit assessment to "ba1" from "ba2", its adjustedbaseline credit assessment to "baa2" from "baa3" and itslong-term counterparty risk assessment to Baa1(cr) from Baa2(cr).

The outlook on the long-term deposit ratings is stable.

The upgrade of the bank's BCA reflects the agency's view ofthe lender's improved solvency, indicated by its improved loan loss coverageratio and recurrent profitability, and its solid asset risk performance.The upgrade of Bankoa's adjusted BCA follows the one-notch upgrade of thebank's BCA.

The deposit ratings' upgrade is driven by the upgrade of theadjusted BCA, the result from the rating agency's advanced loss-given failureanalysis and the agency's assessment of a low probability of government support.The loss-given failure analysis resulted in an unchanged no uplift for thedeposit ratings.

The stable outlook reflects Moody's expectations thatSpain's improved operating conditions will help preserve current trends in thebank's solvency metrics.