We anticipate that a more benign macroeconomic environment in Portugal will likely support banks in tackling pending challenges--particularly restoring domestic profitability, reducing high stocks of nonperforming exposures (NPEs) and credit impairments--and improve access to external financing. The recent finalization of Novo Banco's sale to Lone Star has eased our concern about the implications of a resolution or liquidation of the bank for the general stability of banking sector. In light of this, we now see Portugal's banks as better positioned to deal with restoring their creditworthiness and investor confidence. However, this positive trend will only partly benefit Haitong Bank given its ongoing business model challenges and the international nature of its investment bank activities. We are affirming our 'BB-/B' long-
