Moody’s upgrades Bankia debt to Ba3

Moody's Investors Service said it upgraded Bankia, SA's long-term deposit ratings to Ba2 from Ba3 and its long-term senior debt ratings to Ba3 from B1.

The agency also upgraded the bank's baseline credit assessment (BCA) and adjusted BCA to b1 from b2 and the counterparty risk assessment (CR Assessment) to Baa3(cr)/Prime-3(cr) from Ba1(cr)/Not-Prime(cr).

The outlook on the long-term deposit and senior debt ratings remains stable.

The bank's short-term deposit and senior debt ratings are unaffected.

Moody’s said the action reflects the improvement of Bankia's credit fundamentals, notably in terms of asset risk and capital.

The upgrade of the baseline credit assessment reflects Bankia's improved credit fundamentals, notably in terms of asset risk and capital. Since 2014, Bankia has displayed a sustained improvement in its asset risk metrics, with the non-performing loan (NPL) ratio declining to 10.5% at-end December 2015, broadly in line with the system's average of 10.1% and well below the 12.9% reported a year earlier.

Moody's also noted that the bank has been able to reduce its stock of NPLs by 22% year-on-year, around 55% of which is the result of asset disposals.

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