Novobanco informed the market of the multiple increase in its rating by DBRS Morningstar.

The rating agency raised Novobanko’s long-term deposit and long-term issuer ratings by two levels from BB to BBB (low), and from BB (low) to BB (high), respectively.

The classification of long-term deposits has become investment grade, as is the case with long-term critical liabilities (investment grade).

But the long-term issuer rating remains at B (high). At DBRS, this rating is not yet investment grade (this only happens when the rating is from BBB (High) and above.) But the bank is closer to getting there, with these increases.

The bank’s senior debt also moved from BB (low) to BB (high). Subordinated debt remains at BB (low).

Novobanco’s fundamental rating was also improved to BB (High), with no change in trend at Stable (Stable), the bank revealed in a statement.

The rating action announced today reflects “significant improvement in profitability and capital ratios that exceeded DBRS Morningstar expectations, supported by interest rates, as well as the successful completion of the restructuring exercise, resulting in…
“A significant reduction in the volume of questionable assets,” the statement said.

The stable trend reflects DBRS’ expectations that “Novobanco will maintain strong capital buffers and an adequate liquidity position, as well as consolidate the improvements achieved in terms of recurring profitability and asset quality.”