The Fitch Ratings has upgraded Bank of Cyprus‘s long-term credit rating to ‘BBB’ from ‘BBB-‘ with a stable outlook.

The upgrade reflects an improvement in Cyprus‘ operating environment rating to ‘bbb’, reflecting the agency’s assessment of an improved business and financial outlook for Cypriot banks due to continued economic growth, declining unemployment and lower private debt.

The upgrade also takes into account the continued improvement in Bank of Cyprus’ standalone credit profile due to a further reduction in problem assets, good profitability prospects and sufficient capital buffers.

The group’s ratings reflect its strong competitive position as one of the leading domestic banks in the small Cypriot market.

The ratings are also supported by solid deposit funding, good profitability, satisfactory capitalisation and improved asset quality.