Moody's has given ME Bank a strong endorsement in a ratings commentary issued yesterday. Moody's assigned a bank credit rating to ME Bank for the first time, giving the bank an A3 long-term issuer rating and a Prime-2 short-term issuer rating.The ratings agency said the evolution of ME Bank's funding model in recent years, from one reliant on securitisation to one with a strong deposit base, would make it a more profitable business.Moody's said: "The bank can capture the full net interest margin on mortgages held on balance sheet, whereas with off-balance sheet securitised mortgages it only earns a smaller management fee."As profitability improves, Moody's expects that ME Bank's ability to generate capital from retained earnings will strengthen, such that it can eventually sustain its growth without periodic capital injections."Moody's also pointed to ME Bank's strong asset quality, saying it consistently reports arrears that are lower than system averages.