Security Bank Corp. said it decided not to renew its subscription to the credit rating services of Fitch Ratings because of commercial considerations.
SBC said it was following the banking industry practice of using only two credit rating agencies to assess a bank’s credit standing. Most banks in the Philippines use only two credit rating agencies, it said.
SBC said it decided to go with Standard & Poor’s and Moody’s Investor Services.
“Security Bank has been executing the practice for a long time now. We have maintained our relationship with Standard and Poor’s and Moody’s,” SBC said.
“Fitch’s withdrawal of its credit rating on Security Bank is expected due to the commercial decision the Bank has made,” SBC said.
SBC said Fitch’s withdrawal of its assessment did not reflect the bank’s credit standing and financial performance.
Fitch upgraded in July Security Bank’s foreign currency long term issuer default rating and its local currency long term issuer default rating, along with three other lenders, to “BB+” with “stable outlook” from “BB,” indicating financial flexibility to support servicing financial commitments.
SBC said it recognizes the importance of the role of the credit rating agencies, locally and globally, to the banking industry and wishes to keep a worthy rapport with the agencies in the future.
“Security Bank has a lot of respect for Fitch Ratings. However, Security Bank’s commercial decision and Fitch’s expected subsequent withdrawal of its assessment on the bank are ultimately commercial decisions of both parties,” it said.
Fitch Ratings announced its plan to withdraw its credit ratings on Security Bank on Nov. 16, 2016.