Moody's on April 12 upgraded to A3 from Baa1 's long-term foreign-and local-currency bank deposit and issuer ratings, and maintained the positiveoutlook on the ratings.

The lender's baseline and adjusted baseline creditassessments were raised to "baa2" from "baa3" and its long-and short-term counterparty risk assessments to A2(cr)/Prime-1(cr) fromA3(cr)/Prime-2(cr).

The bank's short-term foreign- and local-currency issuer anddeposits ratings were affirmed at P-2.

Moody's said the upgrade of the baseline credit assessmentreflects the bank's stronger-than-anticipated recovery in profitability; thecontinued de-risking of the bank's balance sheet; and continuous build-up ofthe bank's capital adequacy ratios.

BAWAG's baseline credit assessment will nevertheless remainconstrained by Moody's assessment of the bank's ongoing expansion intohigher-risk asset classes, largely focusing on international corporate andcommercial real estate, the rating agency said.

The positive outlook on the bank's long-term ratingsreflects Moody's assessment of the potential for a continued and furtherstrengthening of the bank's baseline credit assessment, which is likely toaffect all ratings.