spot_img
28 C
Philippines
Friday, March 29, 2024

Moody’s upgrades PNB, RCBC ratings

- Advertisement -

GLOBAL debt watchdog Moody’s Investors Service has upgraded the ratings of Philippine National Bank and Rizal Commercial Banking Corp., two of the largest lenders in the country, taking into account the stable operating environment for banks in the Philippines.

Moody’s said in a statement it upgraded the foreign currency deposit ratings of PNB and RCBC to Baa2/P-2, or medium grade, from Baa3/P-3. Moody’s also upgraded PNB’s local currency deposit rating to Baa2/P-2 from Baa3/P-3.

In the case of RCBC, Moody’s upgraded the bank’s senior unsecured debt and senior unsecured medium-term note program rating to Baa2 and (P)Baa2 from Baa3 and (P)Baa3, as well as the bank’s other short term rating to (P)P-2 from (P)P-3.

Moody’s also upgraded their baseline credit assessments and adjusted BCAs to baa3 from ba1.

- Advertisement -

“The upgrade of PNB and RCBC’s deposit ratings to Baa2 takes into account the one-notch upgrade of their BCAs to baa3, and a one-notch uplift to reflect Moody’s assumption that the banks will receive support from the government of the Philippines [Baa2 stable] in times of need,” Moody’s said.

“The upgrade of PNB and RCBC’s BCAs also takes into account the stable operating environment for banks in the Philippines, supported by a strong economy, and the private sector’s benign leverage and stable debt servicing metrics,” it said.

Moody’s said Philippine banks showed strong funding profiles that were dominated by deposits, and demonstrated little reliance on short-term wholesale funding. These factors were incorporated in Moody’s assessment of the macro profile of the Philippines of moderate(+).

For PNB, Moody’s said the upgrade of its baseline credit assessments to baa3 from ba1 reflected the bank’s improved financial profile since its merger with Allied Banking Corp. in 2013. The bank’s asset quality and capital buffers as a result have become comparable with those of its peers in the Philippines.

“The bank’s high levels of capitalization and loan-loss coverage provide sufficient loss-absorption capacity at its current rating level to withstand moderate asset quality deterioration over the next 12-18 months,” Moody’s said.

Moody’s said PNB’s baseline credit assessment of baa3 was also supported by its relatively stable funding profile with limited depositor concentration compared with other peers in the country. PNB was the fifth-largest bank in the system, with 689 branches and 1,176 ATMs as of the end of September 2017. 

- Advertisement -

LATEST NEWS

Popular Articles