Moody's upgraded the baseline credit assessment of PT Bank Permata Tbk, mainly due its improved standalone credit profile.

The rating agency said March 13 that it upgraded the bank's baseline credit assessment to "ba1" from "ba2." In addition, Moody's affirmed the bank's long-term local and foreign currency deposit ratings at Baa3, short-term local and foreign currency deposit ratings at P-3 and adjusted baseline credit assessment at "ba1."

The outlook on all long-term ratings is stable.

Moody's said the upgrade of Bank Permata's baseline credit assessment takes into account the lender's improved credit profile, mainly driven by the improvement in its asset quality since 2017, following a series of nonperforming loan sales, loan write-offs and the active restructuring of distressed accounts.

The upgrade also reflects the rating agency's expectation of a lower level of support from one of the bank's key shareholders, Standard Chartered Bank, after the U.K. lender's intention to divest its stake in the Indonesian bank. Moody's removed the rating uplift associated with affiliate support from Standard Chartered Bank.

The rating agency believes the Indonesian government would likely provide support to Bank Permata if needed, given the lender's position as one of the mid-sized banks in Indonesia by total assets.

Standard Chartered Bank is a unit of Standard Chartered PLC.