BCP returns to investment rating at Moody’s

 In Banks, News, Ratings agencies

Portugal’s bank BCP has been awarded an investment grade rating 11 years after the banking crisis in Portugal which saw its rating plummet to speculative or ‘junk’ status.

The bank’s CEO Miguel Maya explains that the US agency’s decision reflects a reduction in problematic assets, an improvement in capitalisation levels, and domestic profitability. The bank also set up a funding plan to meet the minimum requirements of own capital and eligible liabilities.
Moody’s announced on Tuesday that it would raise the rating of BCP’s senior unsecured debt — indebtedness for borrowed money that is not subordinated to any other indebtedness for borrowed money and is not secured or supported by a guarantee, letter of credit or other form of credit enhancement — by one level from Ba1 to Baa3 with a stable outlook. It means that Moody’s will not reevaluate the rating for 12 months.
“This step is of significant importance and reflects the excellent work from various teams at the bank over the years”, said Miguel Maya in an internal memo sent to employees.
Now that Moody’s has awarded the bank an investment grade rating, it will strengthen its hand when it goes to the market to obtain finance at lower interest rates.
The bank’s CEO said that despite the good news, there was “no room to slack the pace”. “We must continue to be able to reinvent the bank in order to deserve the preference and confidence of our clients and become more efficient and create more prosperity”.
BCP profits almost doubled in Q1 of 2022 like-for-like to 112.9 million despite losses in Poland which stood at €123 million.