Morgan Stanley had its credit rating outlook raised to positive from neutral by Moody’s Investors Service, two years after the ratings company cut the bank’s grade by two levels.

Morgan Stanley, which topped analysts’ estimates when it announced second-quarter results last week, has made sustainable improvements to profitability and lowered risk in its trading unit, Moody’s said today in a statement. New York-based Morgan Stanley’s senior debt rating is Baa2, two levels above junk, and may be upgraded in the “medium-term,” Moody’s said.

“To the extent Morgan Stanley can demonstrate additional, sustainable progress in growing its profitability without increasing its risk profile, this could result in a ratings upgrade,” Moody’s Senior Vice President David Fanger said in the statement.

In 2012, Moody’s threatened to downgrade Morgan Stanley’s rating by three levels, the most among the biggest U.S. banks, citing a difficult operating environment and greater regulation. Moody’s only reduced it two levels after Morgan Stanley Chief Executive Officer James Gorman made the case that the steeper cut wasn’t warranted. Still, the bank said some clients stopped trading with it while the review was pending.

In November, Moody’s cut the grade by an additional level after deciding the government would be less inclined to help Morgan Stanley repay creditors in a crisis.