Strong economic growth in Iceland continues, with improving economic resilience and falling private sector leverage, partly offset by concerns for increasing economic imbalances. As such, our view of the Icelandic banking sector has improved, as has our expectation for Icelandic bank Islandsbanki's long-term risk-adjusted capital position. As a result, we are raising the long-term rating on Islandsbanki to 'BBB+' from 'BBB' and affirming the 'A-2' short-term rating. The stable outlook reflects our expectation that the Icelandic economy will remain resilient and that Islandsbanki will maintain very strong capital levels even while it prepares for an eventual sale in the next few years. On Oct. 25, 2017, S&P Global Ratings raised its long-term rating on Iceland's Islandsbanki hf to 'BBB+' from
