"The Portuguese economic recovery is consolidating and supporting the performance of the domestic operations of Portuguese banks," S&P said in a note. It added that "the financing profile of the banks should benefit from the improvement in investor sentiment relative to the Portuguese state."


The agency said it had raised its long-term ratings for Santander Totta to BB+ from BB, with a "stable" outlook.


For both Caixa Geral and BCP, the outlook according to S&P has improved to "positive" from the previous "stable", while it kept their credit ratings unchanged at BB-/B and B+/B respectively.


The outlook and ratings for BPI, the country's other major bank, are unchanged at "negative" and BB-/B.