Moody’s improves all the ratings of Bankinter again
The agency has upgraded the long-term IDR rating by one notch, to Baa2, and the long-term deposit rating by two notches, to Baa1.
The rating agency Moody's has today upgraded all the ratings of Bankinter, including its senior unsecured debt rating, and deposit and counter-party risk ratings. Specifically, the US firm has upgraded the Bankinter long-term deposit rating by two notches, from Baa3 to Baa1, and upgraded the long-term IDR rating by one notch, from Baa3 to Baa2, which in both cases carry a stable outlook. In the case of the new rating that assesses the long-term counter-party risk of Bankinter, Moody's has awarded the bank a Baa1 rating, upgraded by two notches from its previous situation, Baa3. At the same time, and as a result of the foregoing, the bank's short-term credit ratings were increased a notch to Prime-2.
Thus, Bankinter has consolidated its rating in the investment grade category, while it has attained the same solvency score as that of the sovereign debt of the Kingdom of Spain (Baa2). This rise follows the upgrade of the rating that was awarded to Bankinter during 2014 by both Moody's and Standard & Poor's.
The decision of Moody's, having revised its rating methodology of Eurozone banks as a result of the commissioning of the Bank Recovery and Resolution Directive (BRRD) and of new bail-in standards, reflects the strength of the Bankinter balance sheet and its ability to face future solvency crises. In this regard, the US firm takes a positive view of the efforts undertaken by the bank to clean up its balance sheet and to strengthen its capital levels. In spite of the crisis and an environment of low interest rates, Bankinter has been able to increase its Basel III Fully Loaded capital ratio to 11.6% at the close of the first quarter, one of the highest in the sector, and contain the level of non-performing loans at 4.6%, almost three times less than the banking system as a whole.
This low level of non-performing loans and the decreased demands of provisions in the future, together with better perspectives of Spanish economic growth, the good progress of the bank's margin in recent quarters and the sustained growth of traditional business with customers (notably private banking, business banking, insurance and consumer financing), will have a positive impact on the bank's income statement and balance sheet, affording it one of the highest credit ratings in the Spanish banking system.
Bankinter increased its net profit by 45.3% in the first quarter of 2015, to 87.2 million euros, and it reached 10.3% ROE, thus becoming the first bank to exceed its cost of capital.