Standard & Poor’s has raised its ratings on a number of Irish banks due to improved profitability in the industry.

The agency raised its rating on Bank of Ireland to BBB-/A-3 with a positive outlook, while its long-term rating on AIB was raised to BB+ with a stable outlook.

The long-term rating on Permanent TSB was also raised to BB- with a stable outlook, while Standard & Poor’s outlook on KBC Bank Ireland’s BBB-/A-3 rating was moved from negative to stable.

Standard & Poor’s said profitability at Irish banks had improved “on the back of expanding net interest margins” while operators’ shift to a “lower risk appetite” was likely to continue.

AIB's mortgage bank raises €750m in bond sale

Separately AIB’s mortgage bank raised €750m after issuing a five year Asset Covered Securities bond at a yield of 0.663%.

The bank said the issuance involved 80 investors from 15 different countries, with the sale being “well oversubscribed”.

AIB said the bond was part of its aim to diversify its funding and investor base while also extending maturity on its debt.