China Banking Corp., the country’s eighth-largest lender in terms of assets, said it received an investment grade rating of ‘Baa2’ from Moody’s Investors Service, one of the world’s major credit rating agencies.
China Bank said in a statement Tuesday the new rating was the same level as the Philippine sovereign rating and at par with the country’s top three biggest banks.
“We are immensely gratified to have earned an investment grade credit rating from Moody’s,” China Bank president and chief executive Ricardo Chua said.
“It strongly validates China Bank’s institutional and balance sheet strength across key indicators. Asset quality continues to improve while we keep credit costs at low level. Our capital ratios are among the strongest in the industry following the P15-billion stock rights offering last month,” Chua said.
Chua said China Bank Savings, which turned into full profitability last year, was also expected to accelerate its contribution to the group’s bottom line.
China Bank chief operating officer William Whang said the rating action would boost the bank’s ability to do more deals especially those where counter-parties were required to be rated by Moody’s or other credit rating agencies.
Moody’s said China Bank’s investment credit rating was underpinned by strong support from key shareholders and strong capitalization. The bank maintained very close multigenerational relationships with businesses as a corporate financier, building on a continuing story of growth.
Moody’s said it was expecting broad stability in China Bank’s asset quality given the robust operating environment and the relatively low level of leverage in the economy.
Fitch Ratings earlier affirmed the bank’s long-term issuer default rating at “BB+”Ÿ and its viability rating at “bb+”Ÿ with stable outlook, following an upgrade in July 2016.
China Bank’s net income surged 15 percent to P6.45 billion in 2016 from a year ago, driven by sustained growth in core businesses. The full-year performance translated into a return on equity of 10.4 percent and a return on assets of 1.16 percent.