Australian bank Suncorp was upgraded from A to A+ by Fitch today (Tuesday), a move that the issuer’s chief executive said lends momentum to its covered bond programme and reduces the gap between it and the majors.

The rating agency upgraded Suncorp Metway Limited’s long term issuer default rating from A to A+, stable outlook, to reflect “the willingness and ability of the Suncorp group to provide timely support to SML if required”.

The A+ rating equals that of the Insurer Financial Strength ratings of Suncorp Metway Insurance Limited and Vero Insurance Limited, the other main operating subsidiaries of Suncorp Group Limited.

“This equalisation of ratings follows more detailed discussions with management on the processes and resources available to the group to provide support,” said Fitch.

Suncorp Bank chief executive David Foster welcomed the rating action.

“This further minimises the gap between Suncorp Bank and the major banks and gives greater momentum to our covered bond programme,” he said. “It reaffirms Suncorp’s position as Australia’s leading regional bank.”

The bank previously said that it has funding requirements of around A$2bn (Eu1.56bn) for 2012, which will be raised in covered bond, senior unsecured or RMBS markets.

Suncorp Bank is Australia’s fifth largest bank, with 2% of total assets.