Santander and BBVA upgraded by Moody's

|By:, SA News Editor

Banco Santander's (SAN) debt rating is boosted by Moody's to Baa1 from Baa2 following the agency's lifting of its outlook for Spain (debt upgraded to Baa2 with positive outlook last week).

"The group's risk-absorption capacity remains resilient despite ongoing asset-quality pressures. At end-December 2013, Santander's problem-loan ratio increased to 5.64% (end-December 2012: 4.54%), mainly driven by the increased level of problem loans in Spain. Despite the negative credit trends in the domestic market, Santander has been able to cope with increased provisioning efforts while maintaining very high pre-provision profitability metrics compared with international peers."

BBVA's rating is lifted to Baa2 from Baa3.

Both stocks are ahead about 2% premarket inline with the big rally underway as tensions cool in Eastern Europe.