After Moody's last year, now it was Fitch that raised the public bank's rating to "investment-grade" status.
Caixa Geral de Depósitos (CGD) continues to recover its credibility in the market. After Moody’s last year, now it was Fitch that raised the public bank’s rating to “investment-grade” status.
The US ratings agency raised CGD’s long-term senior debt rating by one notch from “BB+” to “BBB-“, meaning it is no longer considered a “speculative investment” and now has an “investment-grade” rating. The outlook was revised from “Positive” to “Stable”.
With Fitch’s decision, Caixa now has investment-grade ratings from three international agencies, including Moody’s and DBRS, “constituting an important milestone in Caixa’s growth and positioning in the market,” the Portuguese bank said in a statement sent to CMVM.
According to Caixa, the rating upgrade by Fitch “The upgrade reflects further improvements in Caixa’s asset quality in spite of the pandemic crisis, Caixa’s resilient earnings – grounded on its market leadership in Portugal and sound efficiency levels – and enhanced capital ratios.”
The bank’s results last year give evidence of this positive development: a net profit of €583 million, up 18.7% compared to 2020, ROE up 0.9 points to 7%, lower costs and higher business volumes and capital ratios well above regulatory requirements.
Also, Caixa’s IDR (Issuer Default Rating) and senior preferred short-term ratings were upgraded from B to F3. At the same time, long-term senior non-preferred debt was upgraded by one notch, from BB to BB+, and Tier 2 debt was upgraded also by one notch, from BB- to BB.
The bank’s deposit rating was upgraded to BBB, one notch above that assigned to senior preferred debt and matching the Portuguese sovereign debt rating. “This rating reflects the increased protection afforded to deposits in the event of resolution,” explains CGD.