Moody's Ratings upgrades NIBC Bank to A2 from A3; outlook stable

On Thursday 30 May, Moody's Ratings upgraded NIBC Bank’s long-term deposit and senior unsecured debt ratings to A2 from A3, outlook stable. It also upgraded its short-term deposit and commercial paper ratings to Prime-1 from Prime-2.

Rationale according to Moody’s Ratings:

• The upgrade of NIBC's BCA to baa2 from baa3 reflects the near completion of the bank's business refocusing on Dutch housing loans, asset-based lending and platform finance, concomitant to the divestment of non-core activities.
• Moody's believes that the implementation of the new strategy announced in November 2021 has helped gradually reduce the bank's asset risks, among other factors through a reduction in single-name concentrations, and its earnings volatility.
• NIBC has notably been gradually cutting exposures to the riskiest and most cyclical sectors, including leveraged finance, offshore energy and Collateralised Loan Obligations (CLOs), as well as its small equity and investment loan portfolios.
• The improvement in asset quality was already visible in the lower cost of risk reported in the last two years.