In Brief: S&P Outlook Turns 'Positive' on Riggs

Standard & Poor's Corp. has affirmed its ratings on the debt of Riggs National Corp. and its main banking unit, Riggs National Bank.

S&P also said the outlook for the Washington, D.C., banking company had been revised to "positive" from "stable."

The actions reflect continuing overall improvement in Riggs' credit profile, the rating agency said.

This was shown by the company's significant progress in reducing problem assets, as well as its improved profitability made possible primarily by lower credit costs. No loan-loss provision has been taken in 1996.

The actions also reflect the lower-risk nature of the balance sheet, which has a heavy residential mortgage orientation.

S&P said management has succeeded in carrying out a program to reduce problem assets, rationalize operating costs, and scale back international operations. These steps have returned the company to profitability. A multistep recapitalization in late 1993 and a strong core deposit base provide a firm foundation, S&P said.

Given the lower-risk balance sheet, management's challenge will be to bring revenue and profitability more in line with those at regional and similarly rated peers, S&P said.