S&P Global Ratings yesterday affirmed the 'BBB-/A-3' ratings it has given to Auswide Bank Ltd, with a positive long-term outlook. The emerging regional bank, which has dubbed itself "Australia's 10th bank" controls assets under management of over A$3 billion and has ambitions to expand beyond its home base of Bundaberg and its home state of Queensland.These plans were given a boost when S&P said in a note it expected Auswide's operational risk to "materially improve" with the implementation of a new core banking system, along with the integration of Queensland Professional Credit Union Ltd (trading as Your Credit Union, YCU). In taking Auswide off CreditWatch negative, S&P made particular mention of Auswide's progress on some crucial upgrades to its scale and capabilities - specifically that Auswide has: completed the update of its core banking system, Ultracs; implemented the transformation strategy via Lendfast origination system, with online banking interface implemented, and branch technology infrastructure introduced; and integrated Queensland Professional Credit Union Ltd (trading as Your Credit Union, or YCU) into the Auswide group via its core banking platform.S&P said it now expected Auswide to use its new online capabilities for data analytics "to provide deeper insights into customers and loan origination." In addition, the implementation of the Lendfast system and new online banking interface, will remove manual processes and improve the bank's origination performance.As for the latest M&A deal by Auswide, S&P said: "We don't consider the bank's acquisition of a majority stake in Moneyplace will introduce significant risk." In relation to Auswide's plans to use cashflow to build its capital buffer to 15 per cent, S&P said it expected "an upgrade scenario to emerge" if Auswide executes on capital initiatives to restore its risk-adjusted capital ratio to above 15 per cent within the next 18 months. Clearly S&P's attitude would change if Auswide failed to deliver on its capital management initiatives; had below system loan growth or failed to benefit from its transformation projects and its merger and acquisition activities. Auswide also launched a $300 million residential mortgage backed securitisation yesterday, with the funds raised being used to refinance its two loan funding arrangements and to expand its mortgage book.