Moody’s upgraded SNS Bank’s senior unsecured rating from Baa3 to Baa2 on Friday, citing improvements in the Dutch bank’s standalone risk and structural profitability, and noting a stabilisation of the bank’s franchise.

Moody’s rates the Dutch issuer’s mortgage-backed covered bonds A1, at which level they were affirmed in September. At that time Moody’s noted that the programme was constrained at that level by a combination of a Timely Payment Indicator (TPI) of “probable” and the prevailing Baa3 rating. The A1 rating also relied on a “committed” overcollateralisation level of more than 5%, the minimum consistent with an A1 rating target, with SNS having provided OC of 26.6% on a “committed” basis.